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Thailand Appears Unattractive in Asia

Thailand appears unattractive in Asia

Four Pillars of GDP: Driven by investments and private consumption

As of 3Q19 Thailand has moderate GDP growth; slowdown from as of 2Q19, 1Q19, and 4Q18. GDP growth has mainly been driven by investments, private consumption also contributed well. Net exports have been a heavy drag on GDP growth–suffering from the strong Thai Baht.

Thailand has poor momentum

The Thai market trades above Asia ex Japan and ASEAN markets at 2020CE* 15.3x PE. EPS growth expectations are lower than Asia ex Japan and in line with ASEAN. ROE, however, is slightly higher than both Asia ex Japan and ASEAN.

A. Stotz Four Elements: Thailand’s rank relative to Asia

Overall, Thailand appears unattractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.

Fundamentals: Above-average ROE.

Valuation: Trades above Asia ex Japan and ASEAN on both PE and PB.

Momentum: Poor price momentum and poor earnings growth.

Risk: Low volatility but high beta relative to Asia ex Japan.

Great performance in Utilities and Health Care

Top 3 largest sectors: Financials: 16% of the market; Energy: 13%; Industrials: 11%.

Best sector & stock: Utilities: +6.0% & BGrimm Power PCL: +33.3%.

Worst sector & stock: Real Estate: -9.4% & Filter Vision PCL: -19.3%.


*CE is consensus estimates.

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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.