Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Thematic (Sector/Industry)

<ul><li>In 3Q24E, the earnings of the agribusiness and food sector are expected to recover both YoY and QoQ, particularly for major meat operators with swine businesses in Thailand, Vietnam, and China.</li><li>Their earnings are anticipated to turn around from losses in 3Q23 to profits in 3Q24E, with momentum expected to continue growing QoQ.</li><li>KTX has revised up its earnings projection for TFG but lowered the projection for RBF, as its 3Q24E earnings are expected to decline YoY and QoQ. </li></ul>

In 3Q24E, the earnings of the agribusiness and food sector are expected to recover both YoY and QoQ, particularly for major meat operators with swine businesses in Thailand, Vietnam, and China.Their earnings are anticipated to turn around from losses in 3Q23 to profits in 3Q24E, with momentum expected to continue growing QoQ.KTX has revised up its earnings projection for TFG but lowered the projection for RBF, as its 3Q24E earnings are expected to decline YoY and QoQ. 

Agribusiness and Food and Beverage Sectors - Sep 5, 2024

<ul><li>The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.</li><li>In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.</li><li>Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. </li></ul>

The projected outlook for agricultural and food businesses in 2Q24E indicates a notable recovery both YoY and QoQ.In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits, with further growth expected from their reported better-than- expected operating results in 1Q24.Consequently, we have revised our profit forecasts upward for CPF, TFG and SAPPE. While acknowledging the sector's rebound in operating results, driving up share prices, we maintain a Neutral rating due to stretched valuations, as indicated by the earnings yield method. 

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

<ul><li>Technically, the SET Index is expected to fluctuate, with the resistance at 1,365/1,373 points (10-day EMA and 25-day EMA) and the support at 1,353/1,349 points.</li><li>Overall, the index is in a downtrend pattern, moving within the range of 1,320-1,410 points.</li><li>In the short term, the index is still in the rebound range, with the major resistance at 1,357/1,370 and 1,384 points (1/3 and 2/3 of the Fibonacci range of 1,411.46-1,330.24 points that was observed from April 10-19), which corresponds to the key resistance based on the 25-day and 50-day EMA at 1,373/1,381 points before it dropped to test the previous low at 1,330 points. </li></ul>

Technically, the SET Index is expected to fluctuate, with the resistance at 1,365/1,373 points (10-day EMA and 25-day EMA) and the support at 1,353/1,349 points.Overall, the index is in a downtrend pattern, moving within the range of 1,320-1,410 points.In the short term, the index is still in the rebound range, with the major resistance at 1,357/1,370 and 1,384 points (1/3 and 2/3 of the Fibonacci range of 1,411.46-1,330.24 points that was observed from April 10-19), which corresponds to the key resistance based on the 25-day and 50-day EMA at 1,373/1,381 points before it dropped to test the previous low at 1,330 points. 

KTX Zoom - APRIL 25, 2024 - US 1Q24 GDP/PCE and Corporate Earnings

<ul><li>In April, BoFA's Global Fund Manager Survey revealed a significant decline in the weighting on monthly bond investments, marking the largest decrease since July 2003 (shifting to 7% UW from 14% OW).</li><li>This was driven by expectations of declining bond yields amid accelerating inflation.</li><li>Concurrently, the investment weight on equities rose to its highest level in over 27 months, reaching 34% OW (compared to March's 28% OW, February's 21% OW and January's 9% OW), reflecting a stronger global economic growth trend. </li></ul>

In April, BoFA's Global Fund Manager Survey revealed a significant decline in the weighting on monthly bond investments, marking the largest decrease since July 2003 (shifting to 7% UW from 14% OW).This was driven by expectations of declining bond yields amid accelerating inflation.Concurrently, the investment weight on equities rose to its highest level in over 27 months, reaching 34% OW (compared to March's 28% OW, February's 21% OW and January's 9% OW), reflecting a stronger global economic growth trend. 

Special Report: FMS Most Bullish on Equities Since Jan. 2022

<ul><li>KTX anticipates that the Digital Wallet (DW) scheme, intended to distribute Bt10k in cash to 50mn individuals, which has been postponed since the beginning of 2024, will commence in 4Q24.</li><li>This timing aligns with the increased clarity surrounding the funding sources.</li><li>The funding structure has transitioned from the previously discussed Bt500bn Loan Bill, which raised legal concerns, to the expenditures budget for 2024-25 and the Bank for Agriculture and Agricultural Cooperatives (BAAC). </li></ul>

KTX anticipates that the Digital Wallet (DW) scheme, intended to distribute Bt10k in cash to 50mn individuals, which has been postponed since the beginning of 2024, will commence in 4Q24.This timing aligns with the increased clarity surrounding the funding sources.The funding structure has transitioned from the previously discussed Bt500bn Loan Bill, which raised legal concerns, to the expenditures budget for 2024-25 and the Bank for Agriculture and Agricultural Cooperatives (BAAC). 

Special Report: Digital Wallet to Start in 4Q24 - APRIL 11, 2024

Thailand

Sappe Public Company Limited manufactures and distributes health drinks. The Company manufactures dietary and fruit juice drinks. Sappe distributes their products internationally.

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Sappe Pcl (SAPPE TB)

Agribusiness and Food and Beverage Sectors - Sep 5, 2024

In 3Q24E, the earnings of the agribusiness and food sector are expected to recover both YoY and QoQ, particularly for major meat operators with...

Krungthai XSpring

Agri & Food: Momentum in 2Q24E Expected to Grow YoY and QoQ

In particular, major meat operators, including those engaged in the swine business in Vietnam, are anticipated to shift from losses in 2Q23 to profits

Krungthai XSpring

KTX Zoom - APRIL 25, 2024 - US 1Q24 GDP/PCE and Corporate Earnings

Technically, the SET Index is expected to fluctuate, with the resistance at 1,365/1,373 points (10-day EMA and 25-day EMA) and the support at 1,353...

Krungthai XSpring

Special Report: FMS Most Bullish on Equities Since Jan. 2022

In April, BoFA's Global Fund Manager Survey revealed a significant decline in the weighting on monthly bond investments, marking the largest...

Krungthai XSpring

Special Report: Digital Wallet to Start in 4Q24 - APRIL 11, 2024

KTX anticipates that the Digital Wallet (DW) scheme, intended to distribute Bt10k in cash to 50mn individuals, which has been postponed since the...

Krungthai XSpring

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