Four Pillars of GDP: Driven by investments and private consumption
As of 2Q19 Thailand has moderate GDP growth; slowdown from as of 1Q19 and 4Q18. GDP growth has mainly been driven by investments and private consumption. Net exports have been a heavy drag on GDP growth–suffering from the strong Thai Baht.
Thailand has good ROE
The Thai market trades above Asia ex Japan and ASEAN markets at 2019CE* 16.1x PE. EPS growth expectations are slightly lower than Asia ex Japan and ASEAN. ROE, however, is comparatively strong relative to both Asia ex Japan and ASEAN.
A. Stotz Four Elements: Thailand’s rank relative to Asia
Overall, Thailand appears moderately attractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.
Fundamentals: Strong ROE.
Valuation: Trades above Asia ex Japan and ASEAN on both PE and PB.
Momentum: Poor price momentum and moderate earnings growth.
Risk: Moderate volatility and low beta relative to Asia ex Japan.
Great performance in Communication Services and Utilities
Top 3 largest sectors: Financials: 16% of the market; Energy: 13%; Consumer Staples: 12%.
Best sector & stock: Communication Services: +20.4% & Plan B Media PCL: +35.6%.
Worst sector & stock: Health Care: -5.2% & Bumrungrad Hospital PCL: -18.6%.
*CE is consensus estimates.
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