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.

Thematic (Sector/Industry)

<ul><li>KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.</li><li>This surplus was achieved with imports declining by 1.7% YoY, driven by reduced imports of EVs.</li><li>Concurrently, exports surged to a 14-month high, rising by 7.2% YoY, buoyed by global trade volume trends expected to grow by 2.6% YoY due to easing inflationary pressures.</li></ul>

KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.This surplus was achieved with imports declining by 1.7% YoY, driven by reduced imports of EVs.Concurrently, exports surged to a 14-month high, rising by 7.2% YoY, buoyed by global trade volume trends expected to grow by 2.6% YoY due to easing inflationary pressures.

Economic Update – Exports & Imports - June 24, 2024

Cross Asset Strategy

<ul><li>Technically, the SET Index is expected to move sideways up, with the resistance at 1,310/1,315 points and the support at 1,296/1,288 points.</li><li>This will have a positive effect on the short-term direction of the stock market despite the new low for the year at 1,286.13 points that occurred yesterday.</li><li>We recommend trading buy and cutting losses at 1,296 points on the expectation of a new technical rebound, with the target of 1,330/1,350 points.</li></ul>

Technically, the SET Index is expected to move sideways up, with the resistance at 1,310/1,315 points and the support at 1,296/1,288 points.This will have a positive effect on the short-term direction of the stock market despite the new low for the year at 1,286.13 points that occurred yesterday.We recommend trading buy and cutting losses at 1,296 points on the expectation of a new technical rebound, with the target of 1,330/1,350 points.

Technical Analysis

<ul><li>In the short term, the index has negative sentiment because it was unable to maintain its rebound and quickly swung back down, indicating that it is not ready to recover.</li><li>The market had no additional pressure factors, and black candlesticks continued to appear, demonstrating clear selling pressure.</li><li>The index is, therefore, at risk of weakening to the previous low at 1,288 points.</li></ul>

In the short term, the index has negative sentiment because it was unable to maintain its rebound and quickly swung back down, indicating that it is not ready to recover.The market had no additional pressure factors, and black candlesticks continued to appear, demonstrating clear selling pressure.The index is, therefore, at risk of weakening to the previous low at 1,288 points.

<ul><li>The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.</li><li>In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.</li><li>Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. </li></ul>

The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. 

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

Macroeconomics

<ul><li>Exports in April returned to growth, increasing by 6.8% YoY, or 11.4% YoY when excluding oil, gold, and military-related products.</li><li>The Ministry of Commerce revealed that the trade balance in April was in deficit for the fourth consecutive month, deepening to USD1.64bn (vs. March's deficit at -USD1.16bn) as a result of high growth in imports at +8.3% YoY to USD24.92bn.</li><li>We maintain our recommendation for stocks related to upstream agricultural export products, such as rice and rubber, as well as processed agricultural products like pet food, canned food, and processed chicken.</li></ul>

Exports in April returned to growth, increasing by 6.8% YoY, or 11.4% YoY when excluding oil, gold, and military-related products.The Ministry of Commerce revealed that the trade balance in April was in deficit for the fourth consecutive month, deepening to USD1.64bn (vs. March's deficit at -USD1.16bn) as a result of high growth in imports at +8.3% YoY to USD24.92bn.We maintain our recommendation for stocks related to upstream agricultural export products, such as rice and rubber, as well as processed agricultural products like pet food, canned food, and processed chicken.

Thailand

GFPT Public Company Limited operates a fully integrated poultry business, encompassing feed mills, breeder and broiler farms, hatcheries, chicken evisceration, and processed food production. The company produces and distributes fresh, frozen, and cooked chicken products, as well as land and aquatic animal feed, for both domestic and international markets. GFPT was founded in 1981 and is headquartered in Bangkok, Thailand.

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GFPT (GFPT TB)

Economic Update – Exports & Imports - June 24, 2024

KTX anticipates a potential improvement in Thailand's international trade for the remainder of the year, following May’s trade surplus of USD0.656bn.

Krungthai XSpring

BoE Meeting

Technically, the SET Index is expected to move sideways up, with the resistance at 1,310/1,315 points and the support at 1,296/1,288 points. This...

Krungthai XSpring

Recommendation: Hold Cash

In the short term, the index has negative sentiment because it was unable to maintain its rebound and quickly swung back down, indicating that it...

Krungthai XSpring

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits

Krungthai XSpring

Economic Update – Exports & Imports

Exports in April returned to growth, increasing by 6.8% YoY, or 11.4% YoY when excluding oil, gold, and military-related products. The Ministry of...

Krungthai XSpring

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