Post on 11-Apr-2017
Presented by: Andrew Stotz, CFA 21 August 2015
Thailand is only moderately
attractive in Asia
21 August 2015 2
Taiwan has now moved to 1st from 2nd most attractive in Asia and Thailand is still moderate, but risks falling to unattractive
Thailand
Challenged by slow economic growth versus Asia
GDP: Consumption-driven GDP
Dragged down by weak earnings and moderately expensive
Health Care is the only sector with positive 3mth return
Source: A. Stotz Investment Research
What you will learn
21 August 2015 3
2014A* Attractive Moderate UnattractiveMSCI indices Taiwan Indo Phils India Sing Thai Korea Malay HK China A
FundamentalsROE (%) 13.1 20.3 13.7 15.0 9.8 13.3 8.1 11.5 8.4 13.3
ValuationPE (x) 12.8 14.4 22.4 22.3 13.1 15.5 11.9 15.5 15.2 23.3
PB (x) 1.7 2.9 3.1 3.4 1.3 2.1 1.0 1.8 1.3 2.8
DY (%) 3.7 2.6 2.0 1.5 3.9 3.1 1.5 3.4 4.0 1.6
MomentumEPS growth (%) 27.1 7.2 5.8 (3.6) 9.1 (6.8) (10.7) (5.7) 16.3 (0.4)
Price (1=best) 9 8 2 1 6 3 5 4 7 10
RiskBeta (x) 0.7 0.6 0.4 0.4 0.5 0.4 0.5 0.4 1.3 2.1
Volatility (1=low) 7 8 1 5 6 4 2 3 9 10
Sources: A. Stotz Investment Research, Thomson Reuters.Note: *Prices as of 20 August 2015
Taiwan has now moved to 1st from 2nd most attractive in Asia and Thailand is still moderate, but risks falling to unattractive
21 August 2015 4
Four Pillars of GDP: Consumption-driven GDP
A. Stotz Four Elements (4Es) rank relative to Asia
Sector performance
Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$
Thailand: Challenged by slow economic growth versus Asia
Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645
Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9
1
(3) (3) (4) (5) (6) (7) (9) (9)(24) (30)
(20) (10)
- 10
Sector performanceMcap-weighted return(%, 3mth)
- 1 2 3 4 5 6 7 8 9 10
Risk
Momentum
Overall
Fundamentals
Valuation
Worst Decile ranking Best
8090100110120130140150160
80 90
100 110 120 130 140 150 160
Aug-12 May-13 Feb-14 Nov-14 Aug-15
MSCI Thailand (LHS)Asia ex-Japan rel performance
Index, rebased to 100 (%)
0.98
0.39
0.47
0.40
2.25
- 0.5 1.0 1.5 2.0 2.5
GDP growth - last 4Qs
Net exports (5.8 x 7%)
Investment (2.0 x 24%)
Gov't cons (2.4 x 16%)
Private cons (1.9 x 53%)
(% chg YoY)
(Chg YoY x % of GDP)
21 August 2015 5
Overall: SlowDrivers: Primarily driven by private consumptionLaggard: Contribution from all four pillars, but 2Q15 showed weakened exports
Four Pillars of GDP: Consumption-driven GDP
Sources: A. Stotz Investment Research, Thomson Reuters
0.98
0.39
0.47
0.40
2.25
- 0.5 1.0 1.5 2.0 2.5
GDP growth - last 4Qs
Net exports (5.8 x 7%)
Investment (2.0 x 24%)
Gov't cons (2.4 x 16%)
Private cons (1.9 x 53%)
(% chg YoY)
(Chg YoY x % of GDP)
21 August 2015 6
Four Pillars of GDP: Consumption-driven GDP
A. Stotz Four Elements (4Es) rank relative to Asia
Sector performance
Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$
Thailand: Challenged by slow economic growth versus Asia
Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645
Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9
1
(3) (3) (4) (5) (6) (7) (9) (9)(24) (30)
(20) (10)
- 10
Sector performanceMcap-weighted return(%, 3mth)
- 1 2 3 4 5 6 7 8 9 10
Risk
Momentum
Overall
Fundamentals
Valuation
Worst Decile ranking Best
8090100110120130140150160
80 90
100 110 120 130 140 150 160
Aug-12 May-13 Feb-14 Nov-14 Aug-15
MSCI Thailand (LHS)Asia ex-Japan rel performance
Index, rebased to 100 (%)
0.98
0.39
0.47
0.40
2.25
- 0.5 1.0 1.5 2.0 2.5
GDP growth - last 4Qs
Net exports (5.8 x 7%)
Investment (2.0 x 24%)
Gov't cons (2.4 x 16%)
Private cons (1.9 x 53%)
(% chg YoY)
(Chg YoY x % of GDP)
21 August 2015 7Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$
Thailand: Dragged down by weak earnings and moderately expensive
Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645
Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9
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90
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110
120
130
140
150
160
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90
100
110
120
130
140
150
160
Aug-12 May-13 Feb-14 Nov-14 Aug-15
MSCI Thailand (LHS)Asia ex-Japan rel performance
Index, rebased to 100 (%)
21 August 2015 8
Four Pillars of GDP: Consumption-driven GDP
A. Stotz Four Elements (4Es) rank relative to Asia
Sector performance
Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$
Thailand: Challenged by slow economic growth versus Asia
Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645
Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9
1
(3) (3) (4) (5) (6) (7) (9) (9)(24) (30)
(20) (10)
- 10
Sector performanceMcap-weighted return(%, 3mth)
- 1 2 3 4 5 6 7 8 9 10
Risk
Momentum
Overall
Fundamentals
Valuation
Worst Decile ranking Best
8090100110120130140150160
80 90
100 110 120 130 140 150 160
Aug-12 May-13 Feb-14 Nov-14 Aug-15
MSCI Thailand (LHS)Asia ex-Japan rel performance
Index, rebased to 100 (%)
0.98
0.39
0.47
0.40
2.25
- 0.5 1.0 1.5 2.0 2.5
GDP growth - last 4Qs
Net exports (5.8 x 7%)
Investment (2.0 x 24%)
Gov't cons (2.4 x 16%)
Private cons (1.9 x 53%)
(% chg YoY)
(Chg YoY x % of GDP)
21 August 2015 9
Overall: ModerateFundamentals: Moderate, ROE of 13% is just above the Asia averageValuation: Moderately expensive at 15.5x PEMomentum: Weak, due to poor earnings growthRisk: Low risk due to low beta and moderate volatility
A. Stotz Four Elements (4Es) rank relative to Asia
Sources: A. Stotz Investment Research, Thomson Reuters
- 1 2 3 4 5 6 7 8 9 10
Risk
Momentum
Overall
Fundamentals
Valuation
Worst Decile ranking Best
21 August 2015 10
Four Pillars of GDP: Consumption-driven GDP
A. Stotz Four Elements (4Es) rank relative to Asia
Sector performance
Sources: A. Stotz Investment Research, CIA World Factbook, FactSet, Thomson Reuters, World BankNote: *Consensus estimates **in constant 2005 US$
Thailand: Challenged by slow economic growth versus Asia
Country information:ThailandPrime Minister: General Prayuth Chan-OchaPopulation: 67m2014 GDP**: US$232bnGDP/capita**: US$3,451Equity market:Main index: SET indexMarket cap: US$360bnMarket size/GDP: 96%Market volume: US$1.2bnETF BB code: THD USListed companies: 645
Year end Dec 13A 14A 15CE* 16CE* 17CE*PE (x) 13.6 15.5 14.1 12.4 11.1 EPS growth (%) 0.9 (6.8) 10.3 13.4 12.1 PBV (x) 2.1 2.1 1.9 1.7 1.5 ROE (%) 13.8 13.3 13.1 13.5 13.9 Dividend yield (%) 3.3 3.1 3.3 3.6 3.9
1
(3) (3) (4) (5) (6) (7) (9) (9)(24) (30)
(20) (10)
- 10
Sector performanceMcap-weighted return(%, 3mth)
- 1 2 3 4 5 6 7 8 9 10
Risk
Momentum
Overall
Fundamentals
Valuation
Worst Decile ranking Best
8090100110120130140150160
80 90
100 110 120 130 140 150 160
Aug-12 May-13 Feb-14 Nov-14 Aug-15
MSCI Thailand (LHS)Asia ex-Japan rel performance
Index, rebased to 100 (%)
0.98
0.39
0.47
0.40
2.25
- 0.5 1.0 1.5 2.0 2.5
GDP growth - last 4Qs
Net exports (5.8 x 7%)
Investment (2.0 x 24%)
Gov't cons (2.4 x 16%)
Private cons (1.9 x 53%)
(% chg YoY)
(Chg YoY x % of GDP)
21 August 2015 11
Best sector: Health Care Best performer: Bumrungrad Hospital (+18.4%) Worst sector: EnergyWorst performer: PTT E&P (-31.9%)
Thailand: Health Care is the only sector with positive 3mth return
Sources: A. Stotz Investment Research, Thomson Reuters
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(3) (3)(4) (5) (6) (7)
(9) (9)
(24)
(30)
(25)
(20)
(15)
(10)
(5)
-
5Sector performanceMcap-weighted return (%, 3mth)
21 August 2015 12
Taiwan has now moved to 1st from 2nd most attractive in Asia and Thailand is still moderate, but risks falling to unattractive
Thailand
Challenged by slow economic growth versus Asia
GDP: Consumption-driven GDP
Dragged down by weak earnings and moderately expensive
Health Care is the only sector with positive 3mth return
Source: A. Stotz Investment Research
What you learned
1321 August 2015
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