CGS International Securities (Thailand) (CGSI) raised concerns that Thailand could face tariffs pressure from the U.S. President Donald Trump as the kingdom ranks 10th in trade surplus with the U.S. during the first 11 months of 2024, according to the United States Census Bureau.
In 2024, electronics and electrical appliances accounted for more than half of Thailand’s export value to the U.S., leading to market concerns regarding tariff increases in this sector more than others.
Still, CGSI’s analysis highlights a positive factor from Bloomberg consensus predicting that in 4Q24, Thai listed companies’ net profit will grow by 33% year-on-year and 24% quarterly, which could mitigate market impacts. The sectors expected to see the highest year-on-year net profit growth include ICT, construction, and agriculture. As for quarter-on-quarter growth, the leading sectors are tourism, energy, and media.
However, the petrochemical sector is anticipated to have the lowest year-on-year net profit growth, while the packaging sector is expected to have the lowest quarterly growth.
The analysis team at CGSI suggests investing in domestic play stocks due to the global economic challenges. Recommended stocks include those likely to benefit from government economic stimulus measures, such as retail, consumer finance, and banking sectors. Top picks include AMATA, BCH, BH, CBG, CPN, CRC, MTC, and SCB.
While maintaining the 2025-year-end SET index target at 1,530 points, equivalent to a P/E ratio of 15x in 2026, or -1.25SD of the 10-year average, the recommended groups might face downside risk if Trump’s administration increases tariffs more than expected.
Additionally, the Thai government may need private sector assistance to support electricity cost reduction measures, and there is concern if listed companies’ performances weaken in 4Q24. On the upside, there’s potential if there’s inflow of foreign investment and if the government launches major economic stimulus measures.
