Thailand Appears Most Attractive In Asia

Four Pillars of GDP: Driven by investments

GDP growth in Thailand is moderate, driven mainly by investments. Government consumption has had almost no contribution and net exports have been the main drag on GDP growth in Thailand.

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See 2017 Hedge Fund Letters.

Thailand

Thailand trades in line with ASEAN markets on 2018CE* PE

The Thai market trades slightly above Asia ex Japan and in line with ASEAN markets at 2018CE* 15.6x PE. EPS growth expectations are slightly lower, decent dividend yield, and strong ROE.

  1. Stotz Four Elements: Thailand’s rank relative to Asia

Overall, Thailand appears most attractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.

Fundamentals: Strong ROE.

Valuation: PB is slightly above Asia ex Japan, but ROE is also better. Decent dividend yield.

Momentum: Strongest price momentum, moderate earnings growth.

Risk: Thailand has had the lowest volatility among the 10 Asian markets we compare to as well as a relatively low beta to Asia ex Japan.

The giant PTT drove up the Energy sector

Top 3 largest sectors: Financials: 17% of the market; Energy: 16%; Industrials: 11%.

Best sector & stock: Energy: +24.9% & PTT PCL: +33.3%.

Worst sector & stock: Information Technology: -12.0% & Hana Microelectronics PCL: -24.0%.

*CE is consensus estimates.

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About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.