Asia Plus Securities (ASPS) stated that the market earnings have been 95% reported so far with a combined net profit of 256 billion baht in 1Q21, up 160% year-on-year, which is 37% above consensus. This was mainly due to community plays, which accounts for 35-40% of market earnings, owing to rising commodity prices.
Therefore, ASPS recommended stocks with a strong profit base and particular positive factors. Top picks are STEC, MINT, and SCCC.
Sino-Thai Engineering and Construction Public Company Limited (STEC) benefits from biddings of construction projects. Minor International Public Company Limited (MINT) benefits from vaccine distribution in Europe and city reopening in Thailand. Siam City Cement Public Company Limited (SCCC) is added to MSCI Global Small Cap, so it is enjoying robust fund inflow.
Thailand’s 1Q21 GDP fell 2.6% year-on-year but grew 0.2% quarter-on-quarter, still contracting but better than expected. However, the economy still has downside risk from fast Covid-19 infection in 2Q21. Yet, ASPS revised down the 2021 GDP growth forecast from 2.6% to 1.7%.