CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Thematic (Sector/Industry)

<ul>
<li>We highlight 14 stocks in Thailand that look interesting to us based on our FVMR Methodology</li>
<li>Portfolio changes: Six stocks remain, eight new join the fray</li>
<li>Since inception, it has gained 121% versus the SET 100 Index’s return of 20%</li>
</ul>


We highlight 14 stocks in Thailand that look interesting to us based on our FVMR Methodology
Portfolio changes: Six stocks remain, eight new join the fray
Since inception, it has gained 121% versus the SET 100 Index’s return of 20%


The Stocks to Own in Thailand – Vol. 45

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.

Cross Asset Strategy

<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.

<ul><li>Global fund managers still suggest increasing holdings of safe-haven assets, such as cash, or investing in sectors with recurring income, notably utilities and health care stocks, while they are bearish on risk assets and global growth in the next 12 months.</li><li>Investors also repriced their expectations regarding the terminal fed funds rate in 1Q23 by 50 bps higher.</li><li>However, we expect the Thai market to see a limited impact from the bearishness thanks to the good earnings recovery momentum, in contrast to global economies, as well as the boost from the huge growth in the number of tourist arrivals from 400k in 2021 to an expected 21mn in 2023E.</li></ul>

Global fund managers still suggest increasing holdings of safe-haven assets, such as cash, or investing in sectors with recurring income, notably utilities and health care stocks, while they are bearish on risk assets and global growth in the next 12 months.Investors also repriced their expectations regarding the terminal fed funds rate in 1Q23 by 50 bps higher.However, we expect the Thai market to see a limited impact from the bearishness thanks to the good earnings recovery momentum, in contrast to global economies, as well as the boost from the huge growth in the number of tourist arrivals from 400k in 2021 to an expected 21mn in 2023E.

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

Asean (Thailand) Focused Independent Research

M Corp Review

M Corp is led by Athaporn Arayasantiparb who served as Head of Research for UOB and ANZ in Thailand and was an award-winning telecoms analyst at UBS in 2010 (AsiaMoney Thailand category) and Regional Strategist for DMG in Singapore. Prior to that, he also served as Kasikornbank credit analyst and scholar. He has a total work experience of 17 years, of which 14 were in research and 4 in research management roles. He started his career as an engineer for PTT and currently manages family investments. He holds an MBA from Stern (NYU) and CFA Charter since 2006. Apart from IPO Radar, which focuses on future listings, MCorp Review also provides six on-going thematic series ranked by frequency in descending order, namely: 1) Silicon Stories (technology) 2) Sathorn Series (financial services) 3) Thai-Coons (billionaire origin stories) 4) Reality Check (data-driven, investigative) 5) Thai Media Spotlight; and 6) Thai Macro Watch (global market drivers).

In the review, we look at the distressed Thai aviation industry from four key angles. While there is considerable upside to be had from a sectoral turnaround, survival of most local carriers, with the exception of Bangkok Airways, is really at risk, and neither the government nor private sector may be up to the task of rescuing them:<ul>
<li>
The existential crisis. With Bt330bn of debts in default, Thai Airways is the largest bankruptcy in Thai history, 5.5x the size of TPI's case in 1997. Former subsidiary Nok Air and archrival Air Asia are also restructuring. There's no guarantee any of them will survive the crisis.</li>
<li>
The rescue plans &amp; finances involved. Thai Airways will spend Bt3bn hiring Advisors (Baker &amp; Mckenzie, E&amp;Y, and Finansia). The industry will lay off close to 10,000 people (if not more) to cut costs and are now looking for Bt17bn in soft loans. Even in the best case, THAI probably will need 5 years to get back to profitability...if it survives.</li>
<li>
Reliance on domestic travel and non-core revenues. With international tourism basically dried up, airlines increasingly rely on domestic travel, but that hardly fills their collective fleet of 200 planes. With THAI and NOK at negative equity and AAV at 3.5x gearing, they make money wherever they can now in the short term, ignoring all impact on image.</li>
<li>
International travel recovery. In the long run, international tourism recovery is vital. If the three carriers disappear, it could be a windfall for Bangkok Airways and foreign airlines like Emirates. </li>
</ul>

In the review, we look at the distressed Thai aviation industry from four key angles. While there is considerable upside to be had from a sectoral turnaround, survival of most local carriers, with the exception of Bangkok Airways, is really at risk, and neither the government nor private sector may be up to the task of rescuing them:

The existential crisis. With Bt330bn of debts in default, Thai Airways is the largest bankruptcy in Thai history, 5.5x the size of TPI's case in 1997. Former subsidiary Nok Air and archrival Air Asia are also restructuring. There's no guarantee any of them will survive the crisis.

The rescue plans &amp; finances involved. Thai Airways will spend Bt3bn hiring Advisors (Baker &amp; Mckenzie, E&amp;Y, and Finansia). The industry will lay off close to 10,000 people (if not more) to cut costs and are now looking for Bt17bn in soft loans. Even in the best case, THAI probably will need 5 years to get back to profitability...if it survives.

Reliance on domestic travel and non-core revenues. With international tourism basically dried up, airlines increasingly rely on domestic travel, but that hardly fills their collective fleet of 200 planes. With THAI and NOK at negative equity and AAV at 3.5x gearing, they make money wherever they can now in the short term, ignoring all impact on image.

International travel recovery. In the long run, international tourism recovery is vital. If the three carriers disappear, it could be a windfall for Bangkok Airways and foreign airlines like Emirates. 


Mission Impossible 2021: Rescuing the Thai Airline Industry

Thailand

Asia Aviation Public Company Limited is a Thailand-based holding company primarily engaged in investing in low-fare airline businesses, specifically holding 100% of Thai AirAsia Company Limited. The company's operations include scheduled and chartered flight services, along with providing aviation, tourism, and hospitality training through its subsidiary, Asia Aviation Center Co., Ltd. Asia Aviation was incorporated in 2006 and is headquartered in Bangkok, Thailand.

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Asia Aviation (AAV TB)

The Stocks to Own in Thailand – Vol. 45

We highlight 14 stocks in Thailand that look interesting to us based on our FVMR Methodology. Portfolio changes: Six stocks remain, eight new join...

A. Stotz Investment Research

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

Fund Manager Survey - No Cuts, No Glory

Global fund managers still suggest increasing holdings of safe-haven assets, such as cash, or investing in sectors with recurring income, notably...

Krungthai XSpring

Mission Impossible 2021: Rescuing the Thai Airline Industry

Bangkok Airways might be the only survivor amongst the 4 listed carriers. Short term, Thai aviation relies on domestic tourist, but long term,...

Athaporn Arayasantiparb, CFA

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