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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.