Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>We initiate coverage on AAV with a Neutral rating. While we have a positive view on its fundamentals, with the fair value offering upside of +14%, we remain concerned about its long-term performance, which is expected to grow by only +11%, below the industry average of +15%.</li><li>In the short term, however, we expect the stock price to improve.</li><li><span style="font-size: var(--content-font-size);">The short-term catalyst is the strong growth in 4Q24E core profit YoY </span>and QoQ, driven by seasonal factors and lower fuel costs. </li></ul>

We initiate coverage on AAV with a Neutral rating. While we have a positive view on its fundamentals, with the fair value offering upside of +14%, we remain concerned about its long-term performance, which is expected to grow by only +11%, below the industry average of +15%.In the short term, however, we expect the stock price to improve.The short-term catalyst is the strong growth in 4Q24E core profit YoY and QoQ, driven by seasonal factors and lower fuel costs. 

Asia Aviation - Stock Price Reflects Strong Performance, with the ERP Having Risen Significantly

Thematic (Sector/Industry)

<ul><li>The latest Global Fund Manager Survey by Bank of America polled 179 global fund managers with a total NAV of USD503bn.</li><li>The survey, which took place between November 1-7, includes 22% of responses gathered after the US election results were announced — reflecting partial recognition of the outcome, with Trump being elected US president and the Republican Party likely to have control of both the House of Representatives and the Senate.</li><li>The survey reveals significant shifts in asset allocations in response to these developments. The shift is driven by the US economy showing stronger signs of a "no landing" scenario, while the global downward interest rate cycle appears less pronounced than previously expected. </li></ul>

The latest Global Fund Manager Survey by Bank of America polled 179 global fund managers with a total NAV of USD503bn.The survey, which took place between November 1-7, includes 22% of responses gathered after the US election results were announced — reflecting partial recognition of the outcome, with Trump being elected US president and the Republican Party likely to have control of both the House of Representatives and the Senate.The survey reveals significant shifts in asset allocations in response to these developments. The shift is driven by the US economy showing stronger signs of a "no landing" scenario, while the global downward interest rate cycle appears less pronounced than previously expected. 

FMS Outlook Following Trump's Victory as US President - November 19, 2024

Cross Asset Strategy

<ul><li>We expect economic growth in 2H24E to accelerate beyond the 1.9% YoY expansion seen in 1H24E, serving as a key driver in achieving the revised 2024E GDP growth forecast of 2.55% YoY (up from 2.5% previously).</li><li>This acceleration will also create positive sentiment for stocks benefiting from a top-down approach, particularly those related to government spending, tourism, and the banking sector.</li><li>Government spending is expected to rise thanks to accelerated budget disbursements, while the tourism sector should see strong gains, with tourist arrivals projected to hit 36.5mn by yearend (compared to 20.6mn for 7M24). </li></ul>

We expect economic growth in 2H24E to accelerate beyond the 1.9% YoY expansion seen in 1H24E, serving as a key driver in achieving the revised 2024E GDP growth forecast of 2.55% YoY (up from 2.5% previously).This acceleration will also create positive sentiment for stocks benefiting from a top-down approach, particularly those related to government spending, tourism, and the banking sector.Government spending is expected to rise thanks to accelerated budget disbursements, while the tourism sector should see strong gains, with tourist arrivals projected to hit 36.5mn by yearend (compared to 20.6mn for 7M24). 

Economic Update: 2Q24 GDP Growth - August 20, 2024

<ul><li>Although many Asian bourses bounced up, the SET sank sharply amid concerns that the Fed would maintain interest rates at a high level, alongside the surge of US bond yields, the posting of XD and escalating tensions in the Middle East.</li><li>As a result, a selling force quickly targeted large cap stocks, and foreign investors kept selling heavily, causing the index to get closer to the previous low at 1,350  points.</li><li>The index reverted to its previous sideways movement, opening a gap down and forming two consecutive black candlesticks.</li></ul>

Although many Asian bourses bounced up, the SET sank sharply amid concerns that the Fed would maintain interest rates at a high level, alongside the surge of US bond yields, the posting of XD and escalating tensions in the Middle East.As a result, a selling force quickly targeted large cap stocks, and foreign investors kept selling heavily, causing the index to get closer to the previous low at 1,350  points.The index reverted to its previous sideways movement, opening a gap down and forming two consecutive black candlesticks.

<ul><li>Technically, the SET Index is expected to move up, with the resistance at 1,405/1,416 points and the support at 1,395/1,390 points (75-day EMA).</li><li>As for the overall picture, there is a positive signal after the index broke out from the resistance of the downchannel trend at 1,330-1,395 points on higher volume.</li><li>This should support upward movement to test the previous resistance at 1,416 and 1,435 points, respectively.</li></ul>

Technically, the SET Index is expected to move up, with the resistance at 1,405/1,416 points and the support at 1,395/1,390 points (75-day EMA).As for the overall picture, there is a positive signal after the index broke out from the resistance of the downchannel trend at 1,330-1,395 points on higher volume.This should support upward movement to test the previous resistance at 1,416 and 1,435 points, respectively.

Thailand

Asia Aviation PCL owns a budget airline.  The airline offers low fare flights, online booking, hospitality packages, and courier and cargo services. Asia Aviation serves travelers throughout Asia, the Middle East, and Europe.

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Asia Aviation (AAV TB)

Asia Aviation - Stock Price Reflects Strong Performance, with the ERP Having Risen Significantly

While we have a positive view on its fundamentals, with the fair value offering upside of +14%, we remain concerned about its long-term performance,

Krungthai XSpring

FMS Outlook Following Trump's Victory as US President - November 19, 2024

The survey, which took place between November 1-7, includes 22% of responses gathered after the US election results were announced — reflecting...

Krungthai XSpring

Economic Update: 2Q24 GDP Growth - August 20, 2024

We expect economic growth in 2H24E to accelerate beyond the 1.9% YoY expansion seen in 1H24E, serving as a key driver in achieving the revised...

Krungthai XSpring

Technical Analysis - APRIL 18, 2024

Although many Asian bourses bounced up, the SET sank sharply amid concerns that the Fed would maintain interest rates at a high level, alongside...

Krungthai XSpring

KTX Zoom - APRIL 10, 2024

Technically, the SET Index is expected to move up, with the resistance at 1,405/1,416 points and the support at 1,395/1,390 points (75-day EMA).

Krungthai XSpring

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