China’s leader Xi Jinping has given a New Year speech celebrating the new year of 2025, while also saying that China’s GDP would grow by 5% in the year, and pushing Chinese officials to pursue a more offensive macroeconomics strategy.
Financial Times has reported a speculation that the People’s Bank of China (PBOC) may reduce the interest rate, which currently is 1.5%, “when the time is right” in 2025. Meanwhile, the Chinese government announced the biggest increase in public officials’ salaries in a decade, which would benefit 48 million government and local officials.
China has injected around $12-20 billion into its economy and may issue around $41 billion worth of financing bonds to bolster the existing plan, combined into $61 billion.
Krungsri Securities has estimated revenue contributions to GDP to be around 0.2-0.3% from the aforementioned moves by Beijing, which is considered to be a positive sign after China revealed the purchasing managers’ index (PMI) of the manufacturing sector in October at 50.1 points. Despite a slowdown from the previous month at 50.3 points, it still marked the third month of consecutive growth. Meanwhile, the service sector has its PMI reaching 52.2 points and is expected to see a stimulus measure.
Strategically, the investment that is connected to China’s growth would see a positive benefit, which was led by The Siam Cement PCL (SET: SCC) with THB 290 target price, Indorama Ventures PCL (SET: IVL) with THB 19 target price, SCG Packaging PCL (SET: SCGP) with THB 33 target price, PTT Global Chemical PCL (SET: PTTGC) with THB 32 target price which would benefit from recovery in petrochemical, and Hana Microelectronics PCL (SET: HANA) with THB 44 target price which would benefit from increase electronic parts export.
InnovestX Securities stated that PTTGC would benefit from China’s stimulus measures, while KGI Securities (Thailand) also recommended “buy” PTTGC at the target price of THB 34.
Philip Securities (Thailand) recommended “accumulating” SCC at the target price of THB 290 based on China’s economic stimulus measure.Yuanta Securities (Thailand) stated that China’s economic stimulus measures would have positive sentiment toward China play in petrochemical, packaging, agricultural produce, beverage, tourism, and shipping, which would include following stocks: PTTGC, IVL, SCGP, Sri Trang Agro-Industry PCL (SET: STA), Malee Group PCL (SET: MALEE), Asia Aviation PCL (SET: AAV), Precious Shipping PCL (SET: PSL), Regional Container Lines PCL (SET: RCL), and Wice Logistics PCL (SET: WICE).
