Sawasdee – December 13, 2024

Today’s highlights

• S&P affirms Thailand's credit rating at BBB+, citing continued economic recovery. Outlook remains stable, with a potential upgrade to A- if political stability and consistent policy implementation are achieved.
• The UTCC reported the Consumer Confidence Index in November 2024 at 56.9, the second month of improvement in nine months. Consumers view the government’s economic stimulus measures as effective in alleviating economic and tourism challenges.
• Thailand is ranked as having the second-highest risk after Mexico and the only Asian country in the top 10 of ITIF's "Trump Risk Index." The report evaluates risks among 39 US allies under a Trump administration, with trade and insufficient defence spending highlighted as Thailand's key vulnerabilities.
• The IEA projects a global oil surplus of 950,000 bbl/day in 2025, ~1% of global production. This surplus could grow to 1.4mn bbl/day if OPEC+ increases production starting in April 2025.
• The ECB's monetary policy meeting concluded with a 25 basis-point cut in the policy rate, bringing the deposit rate to 3.0%, as expected, and signals further rate cuts, as inflation continues to come down.
• The PM presented a report on the government’s three-month performance yesterday, assigning the Minister of Energy to address energy price issues by reducing monopolies and driving legislation under the “Reduce-Reform-Build” strategy.
• The tripartite committee meeting on nationwide minimum wage adjustments ended without a conclusion yesterday after reviewing extensive data. The next meeting is scheduled for December 23.

Strategy today

In the short term, the SET is expected to fluctuate with support at 1440-1450 points. Upside will come from measures to address household debt and support farmers, as well as US inflation. Domestic factors are relatively few, but US and Chinese economic data, as well as the ECB's stance, are likely to affect interest rate cuts. Investment strategy is "Selective Buy"

Trading today

In the short term, the SET is expected to fluctuate. Domestic factors are relatively limited, while it is necessary to monitor US trade protectionism policies and the global economic slowdown. Investment strategy is "Selective Buy" across three themes with positive individual factors and one short-term trading idea:

• Stocks expected to benefit from consumption and tourism stimulus and household debt relief measures. Recommend Commerce (CPALL, CPAXT, CRC, HMPRO and TNP) and Tourism (AWC, AOT and MINT).
• Earnings plays: Stocks whose 4Q24 profit is expected to grow YoY and QoQ, and which we tag Outperform – GULF, OSP, AMATA, AU, TIDLOR and BCP.
• Stocks with high dividend yield and expected to be targets of the Vayupak and tax-deductible funds (SSF, RMF and ThaiESG) and with following characteristics: dividend yield of at least 3.5%, high SETESG ratings and high CG and earnings expected to grow - BBL, ADVANC and HMPRO
• Trading Idea: High-risk investors may speculate on lagging stocks with recovery potential: BEM, BDMS, MINT, AP and those with potential inclusion in SET50: BANPU, CCET, COM7 as well as those benefiting from floods in the south: HMPRO, CPALL, TASCO. Caution advised for automotive and con-mat sectors with weak 4Q24.

Daily Top Picks

ADVANC: Poised to benefit as an accumulation target by funds at the year-end, bolstered by its acquisition deal. 4Q24 core profit is expected to grow YoY on less intense price competition. Valuation is attractive as EV/EBITDA is cheap compared to the region.

CPAXT: 4Q24 profit is expected to be this year’s peak, growing YoY on higher sales and margin and QoQ on seasonality. 2024 profit is expected to grow 24.6% and grow another 19% in 2025 (against sector growth of 15%). Synergy is expected to be seen in 4Q24 and become more obvious in 2025-2027.

Download EN version click >> Daily241203_E.pdf