Thailand Microeconomic Weekly Update #34

THAILAND MACROECONOMICS WEEKLY UPDATE

In July, the Industrial Sentiment Index declined from 94.1 in June to 92.3, along with a decrease in the forward-looking FTI index. Phase 3 construction of Laem Chabang Port is progressing on schedule at around 58%, ranking it among the top Eastern Economic Corridor projects.Private sectors of Thailand and Vietnam aim to boost bilateral trade to US$25 billion by 2025. 

Foreign investment in Thailand rose 17% in investor numbers but fell 20% in value in the first seven months of the year. El Niño is projected to decrease Thailand’s planned hydroelectricity purchase from Lao PDR by up to 4 billion units. Thai household spending in July averaged 18,130 baht, slightly dropping from the prior month but still considered high, noted the Trade Policy and Strategy Office.

INDUSTRY

The market’s direction will be influenced by the impact of Thai GDP figures and an upcoming vote, while the ongoing global economic weakness is expected to exert pressure on markets in the week ahead.

TOURISIM AND LEISURE

Dusit Thani Public Company Limited (DUSIT)

In the second quarter of 2023, the Company’s net loss decreased by 27.9% to THB -186 million compared to the same period in 2022. The growth in hotel revenue by 31.5% year-over-year was driven by a 24.9% increase in Revenue Per Available Room (RevPar), resulting from higher occupancy rates and successful efforts to raise the Average Daily Rate (ADR). Food revenue also surged by 65.7% YoY due to the recovery of the international school catering business and investments in baking and related franchise operations made in 2Q22. The Company’s performance, however, weakened QoQ from a net profit of THB 9 million in 1Q23, mainly due to lower hotel revenue during the low season.

CONSUMER PRODUCT 

Sabina Public Company Limited (SABINA)

Sabina Public Company Limited, a manufacturer and retailer of women’s lingerie under its own brand and a distributor of renowned European brand names, has released its operating results for the initial half of 2023. The company achieved a revenue of THB 1,730.7 million, marking an impressive 10.2% year-on-year growth. Additionally, the net profit reached THB 230.1 million, indicating a notable 9.1% increase compared to the previous year. This growth surge can be attributed to the sustained momentum observed since the beginning of 2023, a period that followed the company’s strategic rebranding initiative.

FOOD AND BEVERAGE 

Charoen Pokphand Foods Public Company Limited (CPF)

In the second quarter of 2023, Charoen Pokphand Foods Public Company Limited and its subsidiaries reported sales revenue of THB 150,246 million. International operations contributed THB 93,652 million (62%), while Thailand operations accounted for THB 56,594 million (38%). The Company experienced a net loss of THB 793 million, marking a significant 119% decrease from the same period in the previous year. This decline was due to the reduction of gross profit margin reported at 11.0% declined from 14.5% in the second quarter of the previous year. The main factors are 1) increased production costs, including higher raw material expenses for animal feed production and elevated energy costs. 2)Price of swine was lower than the same period last year due to an oversupply of pork from illegal imports and the decreased impact of the African Swine Fever (ASF) which resulted in an increase in swine production. In addition, market consumption is lower-than-anticipated. 3) Overall economic conditions impacted negatively on purchasing power in various countries.

 

Exotic Food Public Company Limited (XO)

Exotic Food Public Company Limited, manufacturer and distributor of seasoning products, food ingredients, beverages, ready meals, and instant food, has announced an impressive earning with a net profit of THB 212 million in 2Q/2023, an increase 125% from a net profit of THB 94 million in 2Q/2022. The increase was mainly due to an increase that stemmed from an increase in the sales volume of sauces and condiments in Europe and the Americas as well as an increase in the product’s selling prices. In addition, the gross profit margin also increased due to an increase in the customers’ purchase orders which led to the production cost per unit to decrease.

 TECHNOLOGY

Beryl 8 Plus Public Company Limited (BE8)

Beryl 8 Plus Public Company Limited, a prominent consultancy driving comprehensive digital transformation, has announced a remarkable performance in the second quarter. The net profit for this period reached THB 73.04 million, marking an impressive 18.51% increase over the previous quarter. This substantial growth can be attributed to the expansion in revenue, stemming from newly initiated projects during Q2/2023, as well as the ongoing projects that span Strategy and Technology Consulting, as well as License and Subscription services. In addition, the company plans to officially open offices in Australia and Singapore by the end of this year as part of its continued international expansion. The company’s main focus is Australia in terms of international expansion due to the large market size of the end-to-end digital transformation business valued at $57 billion, 14 times larger than Thailand’s, which is worth $4 billion.

 CONSTRUCTION MATERIALS

The Siam Cement Public Company Limited (SCC)

The Siam Cement Public Company Limited, a holding company involved in industrial supply and construction sectors, has announced a significant development. Thai Polyethylene Company Limited (TPE), a wholly owned subsidiary of SCG Chemicals Public Company Limited (SCGC) – itself a wholly owned subsidiary of SCC – has entered a joint venture agreement with Braskem S.A. and its subsidiaries. This collaboration aims to establish a new company focused on producing bio-ethylene, specifically Green-Ethylene derived from ethanol.

In this partnership, SCGC will hold a 49% ownership stake in the joint venture, while Braskem will possess the remaining 51% stake. The produced Green-Ethylene will be channeled to SCGC’s downstream facilities, where it will contribute to the production of Green-Polyethylene (Green-PE). This sustainable material boasts a negative carbon footprint and has garnered global attention for its application in consumer packaging and various end products.

SECTORAL UPDATE

 
             (The SET closed the week today at 1,519.12 points, down 9.69 points (-0.63%), trading value 56,886.66 million baht.)

The SET Index has established support and resistance levels at 1505 and 1550 points due to the absence of new factors. With an RSI of 54, the market is gaining clarity on domestic conditions. The USD/THB pair will continue to exhibit volatility, confined within the range of 35.30 and 35.75.

                                 (For the full month to date of August foreign investors continue to be net sellers.)

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