THAILAND MACROECONOMICS WEEKLY UPDATE

Mrs. Worawan Chitaroon, Director of Industrial Economics (OIE), has highlighted the ongoing trade war between the United States and China, which remains unresolved since October 2022 and is expected to persist in the near term. As a result, major players in the semiconductor industry have started relocating their production facilities from China to other regions, particularly Southeast Asian countries known for their political stability and neutral stance in the US-China conflict. 

This shift has presented an opportunity for Thailand, as a significant company moved its digital camera production base to the country, positively impacting economic activities across various sectors. When examining the factors in the semiconductor and electronics production supply chains of different countries, Thailand, Vietnam, and India were found to have simpler production technologies with a focus on assembly work rather than upstream production. Malaysia, on the other hand, has a more complex production process that utilizes advanced technology, resulting in higher average salaries compared to other countries. 

Despite this, Thailand still remains competitive in terms of its supply chain compared to its rivals, as competing countries have less complex industries. Many companies prefer to relocate their production bases from conflicting countries in order to safeguard their businesses. Thailand, therefore, has the potential to attract investment from these companies due to its favorable conditions.

PROPERTY DEVELOPMENT 

Asian Wellness Residence Company Limited 

Asian Wellness Residence Company Limited (AWR), a recently formed subsidiary of Asian Sea Corporation Public Company Limited, specializes in holding investments in projects related to hotels, service apartments, condominiums, and villas. AWR has recently entered into joint venture agreements with a subsidiary of Origin Public Company Limited. These agreements entail AWR acquiring a 40% stake in One Origin SVP 2 Company Limited, One Origin Khao Yai Thanarat Company Limited, Origin EEC SPV2 Company Limited, and Britania Asian Khaoyai Company Limited, respectively.

TOURISM AND LEISURE

The Tourism Authority of Thailand is optimistic about the upcoming high season (October-December), anticipating a surge in foreign tourists visiting the country. The target is to attract 28-30 million visitors, with a particular focus on Malaysia, China, and India. The expected revenue from tourism is projected to surpass 880 billion baht. However, the emphasis remains on attracting quality tourists who are genuinely inclined to spend on travel experiences.

Minor International Public Company Limited (MINT)

Minor International Public Company Limited (SET: MINT) announced on Tuesday that its subsidiary MFG International Holding (Singapore) Pte. Ltd. has entered into a share sale agreement to purchase 100% shares of Singco Trading Pte. Ltd. for SGD 21 million (roughly THB 546 million). Singco Trading is a holding company for the intellectual property of restaurant brand Sizzler outside of the United States, Guatemala, and Puerto Rico. This investment seeks to acquire ownership of Sizzler’s intellectual property outside of the United States, Guatemala, and Puerto Rico. The company anticipates that this investment will yield royalty income and open up new avenues for growth.

TECHNOLOGY

Bitkub Capital Group Holding Company Limited

Bitkub Capital Group Holding Company Limited, Bitkub Online Company Limited, Real Estate Exponential Company Limited, and Token X Company Limited have signed a memorandum of understanding to introduce blockchain technology into the real estate industry. The aim is to create a new phenomenon by utilizing Real Estate-Backed Tokens or RealX Condo-Backed Tokens. This innovative approach presents an opportunity for Thai real estate, particularly luxury condominiums, which are typically inaccessible to the majority of people in Thailand. Through tokenization and decentralized finance, small investment units can be created, allowing individuals with limited resources to own a fraction of these valuable assets, including those in city centers. The collaboration addresses previous limitations in the real estate industry, such as liquidity and high selling fees. With tokenization, trading can occur 24/7 without transfer fees. Additionally, Bitkub’s extensive customer base, already interested in digital assets, provides a solid foundation for investors to explore RealX and Token X. This partnership signifies a significant turning point for the industry.

INDUSTRIAL MATERIALS AND MACHINERY

Stark Corporation Public Company Limited (STARK)

Stark Corporation Public Company Limited, a holding company overseeing major wire and cable manufacturers, is currently in a severe crisis. The company is embroiled in an accounting scandal and has defaulted on its debt, causing significant turbulence in the financial market. To avoid forced delisting, Stark is planning to restructure its debt.

The consequences have been dire, with Stark’s shares plummeting by 99% in a month due to the default on approximately 30 billion baht (US$842 million) of liabilities. PricewaterhouseCoopers (PwC) conducted an audit that revealed irregularities in the company’s accounting practices, leading to the need for restated financial reports showing consecutive years of net losses.

The SET closed the week today at 1,503.10 points, an increase of 23.53 points (+1.59%), trading value at 56,920.35 million baht.

SECTORAL UPDATE