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>The international trade account in July recorded a deficit of USD1.37bn, reversing from the surplus of USD0.22bn in June.</li><li>However, exports experienced the largest expansion in 28 months, growing by 15.2% YoY.</li><li>This positive performance is benefiting high-growth export stocks such as rubber producers (STA and NER), processed fresh chicken producers (CPF, GFPT, and TFG), canned seafood producers (TU), and pet food producers (AAI and ITC). </li></ul>

The international trade account in July recorded a deficit of USD1.37bn, reversing from the surplus of USD0.22bn in June.However, exports experienced the largest expansion in 28 months, growing by 15.2% YoY.This positive performance is benefiting high-growth export stocks such as rubber producers (STA and NER), processed fresh chicken producers (CPF, GFPT, and TFG), canned seafood producers (TU), and pet food producers (AAI and ITC). 

<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

Technical Analysis

<ul><li>Asian stock markets experienced mixed movements, with the SET lacking new positive catalysts to drive it forward.</li><li>The index's movement has clearly been influenced by fund inflows or outflows, which makes the trend difficult to assess.</li><li>We expect the index to continue moving sideways while awaiting a clear positive signal from the indicators; therefore, we recommend selective speculation.</li></ul>

Asian stock markets experienced mixed movements, with the SET lacking new positive catalysts to drive it forward.The index's movement has clearly been influenced by fund inflows or outflows, which makes the trend difficult to assess.We expect the index to continue moving sideways while awaiting a clear positive signal from the indicators; therefore, we recommend selective speculation.

<ul><li>The Thai swine industry is anticipated to face continued challenges this year, though not as severe as the difficulties encountered in 2023.</li><li>During that period, major operators experienced losses due to rising costs and declining prices, exacerbated by an influx of illegal swine supply and further compounded by sluggish consumption.</li><li>In 1H24E, domestic swine supply is projected to stabilize, with excess supply gradually diminishing.</li></ul>

The Thai swine industry is anticipated to face continued challenges this year, though not as severe as the difficulties encountered in 2023.During that period, major operators experienced losses due to rising costs and declining prices, exacerbated by an influx of illegal swine supply and further compounded by sluggish consumption.In 1H24E, domestic swine supply is projected to stabilize, with excess supply gradually diminishing.

Meat Sector – Thai Swine Prices to Recover in 2H24E

<div><div><div><div><ul><li>We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.</li><li>Our recommended stocks are CBG and SCGP.</li><li><div><div><p>The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.</p></div></div></li></ul></div></div></div></div>

We propose a new set of global plays in accordance with the de- globalization trend, shifting the allocation toward Asia-based companies with better growth prospects than those that generate the bulk of their revenue in Western markets.Our recommended stocks are CBG and SCGP.The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth potential.

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

Thailand

Thai Union Group Public Company Limited is a multinational seafood processing and exporting company, recognized as one of the world's largest producers of shelf-stable tuna products. The company offers a diverse portfolio of frozen, canned, and value-added seafood, including tuna, shrimp, sardines, mackerel, and salmon, along with pet food products, under various global brands such as Chicken of the Sea and John West. Thai Union Group is headquartered in Samut Sakhon, Thailand, and was founded in 1977.

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Thai Union Group (TU TB)

Exports in July 2024 Hit a 28-Month High

The international trade account in July recorded a deficit of USD1.37bn, reversing from the surplus of USD0.22bn in June.

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

Technical Analysis

Asian stock markets experienced mixed movements, with the SET lacking new positive catalysts to drive it forward. The index's movement has clearly...

Krungthai XSpring

Meat Sector – Thai Swine Prices to Recover in 2H24E

The Thai swine industry is anticipated to face continued challenges this year, though not as severe as the difficulties encountered in 2023.

Krungthai XSpring

Changing Landscape for Global Plays - Shifting the Allocation of Global Plays Toward Asia

The global economy is less synchronized than in the past, meaning that a global plays strategy should be more area focused to enhance the growth...

Krungthai XSpring

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