Kiatnakin Phatra Securities (KKPS) noted in its report that, last week, 100 listed companies in the Stock Exchange of Thailand (SET) revealed their 4Q24 performance, which covered 92% of the SET100 market capitalization, excluding those without consensus data. The fourth quarter earnings per share (EPS) surprise dropped to 0.7%, down from 1.8% in the mid-quarter update, and below the 1.5% recorded in 3Q24.
The unexpected winners were primarily in the banking sector, which outperformed forecasts by 8%, while the electronics sector lagged with a 2% miss. Overall sales fell short of expectations by 2.2%.
In terms of the number of companies surpassing expectations, 61% exceeded EPS forecasts, 42% beat sales estimates, and 28% outperformed in both, compared to historical averages of 56%, 52%, and 32% respectively, and last quarter’s figures of 54%, 43%, and 28%.
Companies in the SET100 Index reported a collective net income of 159 billion baht, a 36% increase year-on-year, but a slight decline of 0.2% quarter-on-quarter. In contrast, the broader SET Index recorded a net income of 135 billion baht, reflecting a 24% year-on-year and 33% quarter-on-quarter decrease, suggesting losses within smaller-cap stocks not included in the SET100.
Consequently, the full-year 2024 SET EPS concluded at 69 baht, which is notably below KKPS’ optimistic forecast of 80 baht and marked the weakest level since 2016. The SET100 Index constitutes about 80% of the overall SET Index in terms of earnings and market cap.
Looking to 2025, consensus EPS revisions have decreased by 2.3% year-to-date, with significant downward adjustments in Energy (-6%) and Materials (-17%). Conversely, sectors like Telecommunications (+10%), Banks (+2%), and Food (+3%) have seen upgrades, driving total market earnings.
The headline SET 2025 consensus EPS stands at 95 baht, indicating projected growth of 37%, a figure KKPS considers overly optimistic given the prevailing economic conditions and cautious corporate guidance. Historically, EPS downgrades average between 15%-20% during the year. Excluding Energy and Materials, the SET 2025 EPS remains stable at 68 baht, marking a modest 0.3% increase year-to-date.
KKPS’ BofA Thailand Earnings Revision Ratio, suggests significant downside risk. The analyst maintains the stance that sectors considered defensive and resilient in earnings will likely continue to outperform relative to the broader market, highlighting that Banks and Telecoms should act as defensives in a risk-averse climate marked by uncertainty.
When considering stocks with discounted valuations, quality selectivity is emphasized, with Hospitals flagged as a favorable sector. Given the market’s de-rating cycle and existing risks, the analyst projects that the SET Index could fluctuate between 1,000-1,300 points, based on EPS forecasts of 80-90 baht and a forward price-to-earnings ratio of 12x to 14x.
