The share price of Indorama Ventures Public Company Limited (SET: IVL) extended its gain by 4% to THB27.00 in the morning session on Friday, following optimism in the stock market from China’s economic stimulation that should benefit chemical leaders like IVL.
In the annual economic conference led by President Xi Jinping that wrapped up on Thursday, China signaled its intent to employ proactive fiscal policies geared towards bolstering its growth. Plans to increase the country’s deficit along with the issuance of more ultra-long bonds in the subsequent year were highlighted in the state press report.
The strategy to moderately relax stringent monetary policies, an approach reminiscent of the 2008 global financial crisis, was also reaffirmed during the session.
The meeting explicitly exhibited China’s determination to fortify its currently frail economy, amidst concerns of a potential trade warfare with the United States spurred on by the return of President Donald Trump to office.
Plans to further liberalize China’s economy were also articulated during the meeting. Beijing has alreadly demonstrated this commitment earlier this year, when it extended visa-free travel provisions to citizens of Japan and a few other nations – a gesture for which reciprocation has not been demanded.
Earlier, Krungsri Securities (KSS) wrote in an analysis research that the announcement is viewed positively by its global macro strategist as it reflects a proactive strategy to prepare for potential economic impacts following Donald Trump’s inauguration on January 20. Currently, China’s economy shows limited progress in recovery, particularly in the real estate sector, which has begun to slow down after a rebound in October. Other sectors have not shown significant recovery either.
Additionally, stimulus measures aimed at enhancing liquidity for local governments have been slow to implement. Based on this, the analysis speculates that further economic stimulus announcements could be made during the upcoming conference.
In terms of investment strategy, the strategist suggests accumulating China Play stocks, with a focus on IVL (TP-Con @ THB28.2) SCC (TP @ THB220) PTTGC (TP @ THB30.0).
Krungthai XSpring Securities stated in its analysis that it expects IVL’s performance in 2025 to improve, driven by higher sales, lower CAPEX, an improved product mix and higher spread. Furthermore, there are plans to list two of its subsidiaries on the stock market by the end of 2025 or the first quarter of 2026, with an estimated value of around 1 billion USD. Bloomberg Consensus has set a target price for IVL at THB 29.27 per share.
