2023-09-23 15:48:00
Dao Securities reveals the benefits and losses of stocks After the baht weakened past 36 baht/dollar, look at stocks exporting food, electronics, and tourism. Receive positive feedback, holding AAI-TU outperform SET by as much as 60%. As for airlines-power plants-energy groups The most wasted. Cause of increased cost pressure Given the dollar debt burden, AAV-BA is seen to have a dollar cost of around 60%, while PTTGC-TOP energy may record unrealized fx losses.
Securities analysis from Dao Securities (Thailand) revealed that the baht reached the level of 36.11 THB/USD, returning to depreciate by approximately 6.4% on September 21 from the most strengthened during the period. Mid-July 2020 at around 33.95 THB/USD, which is considered the most depreciation in 10 months due to concern over the recovery trend of the Thai economy after Thailand’s GDP in 2Q23 expanded less than expected, while the USD still Appreciate with support from signals of tightening monetary policy of United States Federal Reserve (Fed), which indicates that The US interest rate increase cycle Still not ending
In addition, the trend of the baht’s value is likely to depreciate. Since the Fed is still likely to send a tight signal This may support the USD and US bond yields to rise. In addition, the recovery of the Thai economy in 2023 appears to be slower than the original estimate. with pressure from exports slowing down
As for government measures that are prepared to be implemented in the future It is another factor that the market is waiting for clarity on. Because it will affect the assessment of the fiscal status. Guidelines and size of debt creation Including fiscal burdens both inside and outside the budget that may occur in the next 6-12 months.
In this regard, there has been an evaluation of stocks that benefit and lose benefits. from the depreciation of the baht, consisting of:
Point out that 4 groups benefiting from the weak baht view AAI-TU as outperforming SET the most.
– For stocks/industries that are expected to receive positive results from “The value of the baht is depreciating”
1) Agriculture and Food Group Because most of its income is from abroad. In order, every 1 baht depreciation will result in increased profits: ITC +10%, AAI +10%, TU +7%, SUN +3%, PLUS +2%.
2) Electronics group This is because most of its income comes from exports abroad. In order Every 1 baht depreciation will result in an increase in profits. It will result in increased profits KCE +6% and HANA +5%.
3) Travel group Benefit from the depreciation of the baht. That makes foreigners more interested in traveling to Thailand. Especially European and US customers who are close to entering the high season of tourism. The stocks that will benefit in order are ERW (revenue proportion in Thailand 88%), CENTEL (revenue proportion in Thailand 80%) and AOT. will benefit from an increase in the number of tourists
4) Other industries that were positively affected by the weak baht Because most of its income comes from exports, namely MEGA estimates that every 1 baht that depreciates will increase profits by +5%. EPG estimates that every 1 baht that depreciates will increase profits by +3%-4%. TOG estimates that every 1 baht will increase. which weakens causes profits to increase +3% -4% BANPU Every 1% that the baht depreciates against the US dollar will have a positive effect on 3Q23E profits by approximately USD13mn.
The stocks that benefit from the weakening baht and have the greatest chance of outperforming the SET include AAI, TU ( + ) AAI (Buy/Target 5.00 baht) has a high proportion of export income of 96% and most of its costs are in baht. While operating performance has passed its lowest point in 1Q23 and 2H23E will recover more, HoH from inventory destocking has eased. The stock price has recently dropped by -47% YTD, reflecting negative factors (ITC 29% YTD) ( + ) TU (Buy/Target 16.00 baht) has a proportion of export revenue as high as 96% and costs 60-70% in baht, while normal profits 2H23E will continue to be good HoH from the inventory destocking situation easing and tuna costs gradually weakening. go down
Airlines-Energy-Power plants Affected by the weak baht
– For stocks/industries that are expected to lose benefits from the “weak baht”
1) The airline group AAV, BA has a cost structure in dollars of approximately 60%. The weakening of the baht will Causing costs to increase, for AAV to have approximately $1 billion in USD debt, there will be an unrealized FX loss of approximately 1 billion baht from every 1 baht depreciation.
2) The energy sector has negative net exposure to the movement of the dollar against the baht. As a result, unrealized fx losses may be recorded for PTTGC, TOP, while the impact on PTTEP and SPRC is likely to be limited due to the use of USD as the functional currency and IVL as a natural hedge.
3) Power plant group Due to a dollar-denominated loan, unrealized fx losses were recorded. However, the said transaction was only an accounting transaction and did not have an impact on cash flow. The stocks affected by the aforementioned issue include GULF, BGRIM, GPSC. , RATCH, GUNKUL
4) IT Distributor SYNEX, SIS group: Because products are imported using USD, the baht depreciation will Resulting in negative costs.
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