Executives from 24 SET-listed firms and 169 investors participated in our Thai Corporate Day last week. Most of the firms that spoke at our event expressed confidence over the recovery’s sustain-ability through 2H22, despite inflationary pressures. High energy and food prices may squeeze spending power among low-income demographics, but the release of pent-up demand and the return of tourists should outweigh that effect.
Back-to-normal plays and tourism-related themes are in play—malls, consumer staples retailers, the Hotel and Bank sectors, and some hospital operators—have strong 2H22 recovery stories. In contrast, the 2H22 numbers for consumer discretionary plays and the Media and Finance sectors are likely to be dampened by price pressures. The outlooks for commodity-dependent plays, such as packaging, airlines, and food & beverage, should improve when commodity costs ease. High-growth plays with high PERs are also emphasized, as their businesses have scope for upside to earnings forecast, given their fast expansions, so their valuations could remain elevated. Overall investor feedback was cautious. Earnings visibility was a key focus of the investors we spoke with.