Asia Pacific Equity Research 20 June 2014
Thailand 101 An equity investor's guide to the land of smiles
Thailand Equity Strategy Anne Jirajariyavech, CFA AC (66-2) 684-2684 [email protected] Bloomberg JPMA JIRAJARIYAVECH
GDP per Population capita (million) (Bt) Bangkok & vicinities 15.01 359,798 Northeast 18.87 67,888 North 11.59 91,922 South 8.99 124,914 East 5.33 414,568 West 3.58 121,651 Central 3.13 226,501 Source: National Economic and Development Board.
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www.jpmorganmarkets.com Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Thai 101 This report aims to be a primer on the Thai equity market. Rather than long prose, charts and tables are used to convey information on market performance (page 4), evolution, valuations and key events plus information on the main industries (page 18), economy (page 13), demographics (page 11) and business groups (page 26). Please contact J.P. Morgan's EM Strategy and Thai Research team for more information and advice on the Thai equity market (see page 49 for the team directory). Tables Table 1: MSCI Thailand performance...... 3 Figure 18: Exports composition (product)...... 14 Table 2: MSCI Thailand performance breakdown, Figure 19: Exports: Trade partners ...... 14 GDP and inflation ...... 3 Figure 20: Thailand: Export destinations ...... 15 Table 3: MSCI Thailand: Best and worst Figure 21: Malaysia and Thailand: Fixed Investment.... 15 performers based on risk adjusted return...... 3 Figure 22: Thailand: Export composition...... 15 Table 4: Current forward PE with quartile range (10Y).....3 Figure 23: EM ASEAN FX devaluation...... 16 Table 5: Which valuations measures work? Figure 24: Thailand FX reserves (US$bn)...... 16 Summary of R-Squares from regression analysis ...... 9 Figure 25: Balance of payments ...... 16 Table 6: Prime ministers in the office since 1988 ...... 10 Figure 26: Large external banking liabilities...... 17 Table 7: Thailand rankings...... 11 Figure 27: Thailand RoE (%) ...... 17 Table 8: Total and working age population ...... 11 Figure 28: The mighty fall: Finance One share price..... 17 Table 9: Thai financial crisis timeline...... 17 Figure 29: Prime Lending Rate (%)...... 17 Table 11: MSCI Thailand sector composition ...... 18 Figure 30: NPLs peak at 45% in 1999 ...... 17 Table 12: MSCI Thailand industry composition...... 18 Figure 31: Deposit growth...... 19 Table 13: Thailand’s macro economic indicators ...... 35 Figure 32: Loan growth...... 19 Table 14: Stock Exchange of Thailand Figure 33: NPL ratio ...... 19 and MSCI Thailand constituents (%) ...... 36 Figure 34: Net interest margin...... 20 Table 15: Political Timeline ...... 44 Figure 35: Loan market share...... 20 Figures Figure 36: Deposit market share...... 20 Figure 37: Banks' loans/deposits ratio...... 21 Figure 1: Thailand sector composition ...... 3 Figure 38: Loan breakdown...... 21 Figure 2: Stock trading composition ...... 3 Figure 39: New project launches (units)...... 22 Figure 3: Stock Exchange of Thailand Index (log chart)..4 Figure 40: More condos…Breakdown of new Figure 4: Forward PE and drivers of re/de-rating ...... 5 launches...... 22 Figure 5: Market evolution: Thailand Market Figure 41: Average unit price...... 22 Capitalization, Equity Issuance and Sector composition over time...... 6 Figure 42: Modern trade penetration...... 23 Figure 6: The Currency: Thai Baht, real effective Figure 43: Tourist arrivals...... 23 exchange rate, current account and interest rate Figure 44: Private consumption vs Farm income...... 23 differentials...... 7 Figure 45: Retail sales area - for six stocks under Figure 7: Thailand Key events and Macroindicators...... 8 our coverage...... 24 Figure 8: Adjusting for changes in sector composition: Figure 46: Domestic petroleum products consumption Thailand sector neutral fwd PE...... 9 leveraged to Thai GDP growth ...... 24 Figure 9: Earnings yield versus bond yield...... 9 Figure 47: Domestic gas production and increasing Figure 11: Population pyramid ...... 11 dependence on gas imports...... 24 Figure 12: Labor productivity growth (%)...... 11 Figure 48: Domestic power consumption leveraged to Thai GDP growth...... 25 Figure 13: Urbanization rate in the last decades and forecast (CAGR)...... 12 Figure 49: Domestic natural gas consumption leveraged to Thai GDP growth...... 25 Figure 14: Urban and rural population as % of total ...... 12 Figure 50: Domestic cement demand leveraged to Thai Figure 15: Ethnic group breakdown...... 12 GDP growth...... 25 Figure 16: GDP composition (expenditure)...... 13 Figure 51: Domestic cement inustry remains in Figure 17: GDP composition (primary, secondary overcapacoty since the 1997 Asia crisis...... 25 and tertiary activity) ...... 13
2 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Key Facts: The returns….the market Highest return year 2003 +145%; Table 2: MSCI Thailand performance breakdown, GDP and inflation accelerating growth and low PE EPS Fx Dividend Total Return Rel.return GDP Inflation inflation – helped by aggressive Year Re/De-rating Return Return Returns (US$) to EM (US$) (%oya) (%oya) pro-growth policies 1989 25 68 (2) 4 114 49 12.2 5.4 1990 (46) 28 2 3 (27) (17) 11.2 5.9 Largest loss 1997 -73%; 1991 49 (21) 0 4 23 (37) 8.6 5.7 unsuccessful fx intervention and 1992 (9) 45 (1) 4 35 24 8.1 4.1 eventual mid-year Baht devaluation 1993 200 (34) (1) 3 104 29 8.3 3.3 followed by deep recession in 1998 1994 17 (26) 2 2 (9) (2) 9.0 5.1 1995 (34) 44 (0) 2 (4) 1 9.2 5.8 Table 1: MSCI Thailand performance 1996 (36) (2) (2) 2 (37) (43) 5.9 5.8 1997 10 (56) (47) 3 (73) (62) (1.4) 5.6 Period CAGR CAGR 1998 NM NM 33 0 12 37 (10.5) 8.1 (US$) (LC) 1999 NM NM (3) 0 47 (19) 4.4 0.3 3Y 4.1 7.1 2000 NM NM (13) 1 (56) (26) 4.8 1.6 5Y 25.6 24.2 2001 8 (3) (2) 2 5 8 2.2 1.6 10Y 11.1 9.0 2002 (19) 50 3 3 28 34 5.3 0.6 20Y 0.0 1.2 2003 17 85 9 4 145 88 7.1 1.8 26Y (Inception) 8.2 9.3 2004 (10) 5 2 3 (1) (27) 6.3 2.8 Source: MSCI, Datastream, J.P. Morgan 2005 1 9 (5) 4 9 (25) 4.6 4.5 Figure 1: Thailand sector composition 2006 (2) (4) 13 5 12 (21) 5.1 4.7 2007 19 10 7 4 47 7 5.0 2.2 HC Utilities 2008 (36) (20) (3) 4 (48) 5 2.5 5.5 Industrials2% CD 1% 4% 4% 2009 52 7 4 4 77 (2) (2.3) (0.9) 2010 8 27 11 4 56 37 7.8 3.3 CS 2011 (17) 19 (4) 3 (2) 16 0.1 3.8 10% Financials 2012 19 6 3 3 35 16 6.5 3.0 36% 2013 (6) (5) (7) 3 (14) (12) 2.9 2.2 Telecom Median* 1.1 7.4 3.1 4.0 11.6 4.9 5.0 3.0 10% Source: MSCI, IBES, Datastream, J.P. Morgan, * Median over last 10Y
Materials 12% Table 3: MSCI Thailand: Best and worst performers based on risk adjusted return Energy 21% Name Ticker Sector FF MCap CAGR Sharpe Ratio (US$bn) (10Y) Source: MSCI, Datastream, J.P. Morgan Home Product Cen HMPRO TB CD 0.9 38.9 1.0 Bangkok Dusit Md BGH TB Healthcare 1.5 36.9 1.0 CP ALL Pcl CPALL TB CS 6.1 35.2 0.9 Figure 2: Stock trading composition Charoen Pok Food CPF TB CS 2.3 28.4 0.7 100% Minor Intl. MINT TB CD 1.2 30.9 0.7 Bts Group Holdin BTS TB Industrials 1.5 6.1 0.1 80% Thai Oil Pcl TOP TB Energy 1.2 7.4 0.1 True Corp Pcl TRUE TB Telecom 1.1 5.4 0.0 60% IRPC Pcl IRPC TB Energy 1.1 0.4 (0.1) TMB Bank Pcl TMB TB Financials 0.9 (0.4) (0.1) 40% Median for MSCI Thailand 15.2 0.3 MSCI Thailand MXTH Index 85 11.3 0.3 20% Stock Exchange of Thailand SET Index 156 12.8 0.4 Source: MSCI, Datastream, J.P. Morgan, Sorted by sharpe ratio column, Thailand risk free rate assumed at 4%, Annualized standard 0% deviation of monthly returns, 28 May 2014 03 04 05 06 07 08 09 10 11 12 13 14 Foreign investors Local institutions Table 4: Current forward PE with quartile range (10Y) Proprietary Retail investors Current Min 1 Quartile Median 3 Quartile Max Avg SD Source: Stock Exchange of Thailand, J.P. Morgan Energy 9.3 5.4 8.6 9.2 9.9 12.7 9.3 1.2 Financials 9.8 7.1 9.6 10.4 11.0 12.8 10.3 1.2 Foreign ownership 34% (May 2014, Materials 11.2 5.6 9.1 9.9 11.2 13.1 10.0 1.6 including 6.9% in non-voting Thailand 11.8 6.6 9.8 10.6 11.2 12.8 10.5 1.2 depository receipts (NVDR) and Thailand sector neutral 12.2 6.3 10.3 11.5 12.3 14.3 11.3 1.3 Thai Trust Fund (TTF)) Utilities 12.4 6.6 8.7 9.8 11.8 13.6 10.2 1.8 CD 19.9 11.6 14.9 17.6 19.6 25.0 17.3 3.2 An NVDR is issued by Thai NVDR designed Telecom 20.8 10.5 13.5 14.7 16.3 25.1 15.2 2.9 to accommodate foreign investors who are CS 21.0 8.2 10.1 14.3 17.4 24.0 14.6 4.4 interested in investing in companies that Industrials 23.3 6.5 8.8 10.3 14.2 24.8 12.3 5.0 may be subject to foreign ownership Healthcare 30.7 24.3 26.3 28.4 30.3 34.0 28.5 2.8 restrictions/limits. NVDRs provide same Source: MSCI, IBES, Datastream, J.P. Morgan, Sorted by current fwd PE column financial benefits as normal ordinary shares. The only difference is in regard to voting. Both Thai and foreign investors can invest in NVDRs.
3 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Long Term Charts Figure 3: Stock Exchange of Thailand Index (log chart)
1920 4 January 1994 SET 1753 high
July 1962 private group establish a stock exchange. Converted to limited company in 1963 forming the 'Bangkok Stock Exchange Co., Ltd' (BSE). 30 June 2007 Volumes were low and the BSE ceased operations in early 1970s. PM Chavalit Yongchaiyudh vows to "The Securities Exchange of Thailand" (SET) starts trading 30 April 1975. defend the Baht 960
2 July 1997 Baht/USD 24.4 to 29.15 18% devaluation 480
SET name changed to 'The Stock Exchange GFC correction 48% of Thailand'. From 21 April to 29 12 January 1998 October 2008 THB/USD 55.5 EM (local fx) 55% below pre-crisis correction 56%
240
4 September 1998 SET 207 low Down 88% from 1994 high
120
60 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
140 250 MSCI Thai rel to MSCI EM 200 MSCI Thai rel to MSCI APxJ
120 150
100 100 50
0 80 88 93 98 03 08 13
60
SET index rel AxJ 40
20
0 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: MSCI, Datastream, J.P. Morgan.
4 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Figure 4: Forward PE and drivers of re/de-rating 10 Thailand real GDP QoQ SAAR 8 Asian financial 6 crisis 4 2 0
-2 Global financial -4 Diesel price increases from crisis May 10 THB14.6 to 27 and BoT policy Bangkok Floods -6 rate 2.5% to 4%. riots -8 (red-shirt) -10 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Thailand 12M fwd PE 30 Average +1SD -1SD Median 25
20
15
10
5 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
15 Thailand 1-Day Repo 13 Thailand 10Y bond yield 11 Thailand CPI (%oya) 9 7 5 3 1 -1 -3 -5 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Source: MSCI, IBES, Datastream, Bloomberg, J.P. Morgan
5 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Figure 5: Market evolution: Thailand Market Capitalization, Equity Issuance and Sector composition over time 10 500 Annual Equity Issuance (US$bn) Mk Restaurants True Infras Fund Thailand Market Cap (US$bn, RHS) 9 Bts Infras Fund 450
8 400
7 350
6 300
5 250
Home Central 4 Bangchak Product 200 Pattana Petrole Cen Airports Jasmine Delta Elec Ptt Pcl Of Thai 3 Intl Pcl Thai Glow 150 Elec Thai Energy Siam Makro Pcl Ptt Global Pub Generating Oil Pcl Chem Pruksa Bangkok 2 Irpc Pcl Life 100 Thaicom Pcl Bec Home Real World Product Thai Ass Indorama Thai Union Estate Total Tap Froze Pcl Cen Siam Venture 1 Ptt Pcl Access Water 50 Ratchaburi Com Global Elec Hous 0 0 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Consumer Discretionary Consumer staples Energy Financials Healthcare Industrials Information Technology Material Telecom Utilities Source: MSCI, Datastream, CEIC, Stock exchange of Thailand, J.P. Morgan
6 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Figure 6: The Currency: Thai Baht, real effective exchange rate, current account and interest rate differentials 14 15 Thailand CAD (% of GDP) Thailand Import Cover (months, RHS)
10 12
6 9
2
6 -2
3 -6
-10 0 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Jan 70 Jan 71 Jan 72 Jan 73 Jan 74 Jan 75 Jan 76 Jan 77 Jan 78 Jan 79 Jan 80 Jan 81 Jan 82 Jan 83 Jan 84 Jan 85 Jan 86 Jan 87 Jan 88 Jan 89 Jan 90 Jan 91 Jan 92 Jan 93 Jan 94 Jan 95 Jan 96 Jan 97 Jan 98 Jan 99 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 20 150 USDTHB Currency (Inverted) Thailand REER (RHS)
25
125 30
35
100
40
45 75
50
55 50
20 5 O/N lending rate diff with US 3M int rate diff with US (RHS) 4 15 3
10 2
1 5
0 0 -1
-5 -2 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Source: Bloomberg, Bank of Thailand, J.P. Morgan economics
7 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Figure 7: Thailand Key events and Macro indicators 700 12/08: Constitutional MSCI Thailand 03/92: General election. 09/92: 07/95: Court dissolved 05/14: Constitutional Court finds PM Samakee Tham Party General General 09/08: Constitutional Court found PM Samak PPP, 2 coalition Shinawatra, 9 cabinet ministers guilty, dismisses led by Narong Wongwan election. election. guilty of conflict of interest, terminated parties, PM them. Military imposes martial law, coup on 22 premiership. S. Wongsawat is new PM 600 won the election but Chuan Banharn Wongsawat banned May people did not accept Leekpai, Silpa-archa 12/07: General for 5yrs. New PM 10/13: Many 03/14: Constructional him, General Suchinda leader of of Chart 05/07: Constitutional election with Abhisit Vejjajiva 07/11: PTP won people Court annuls Feb gen Kraprayoon was installed Democrat Thai Party Tribunal found Thai Rak People's Power 03-05/10: UDD elections; Yingluck joined rallies election. Senate Election 500 as PM. There were Party, was was elected Thai guilty and dissolved Party won and protestors Shinawatra new PM in Bangkok demonstrations against choosen as PM the party as well as against the Chosen Mr. Samak began protests 05/11: PM Abhisit General Suchinda prime banned its 110 executives in B'kok, army controversial 11/96: Banharn's government Sundaravej was dissolved the forcing him to resign. minister from politics for 5 years overran protest amnesty bill resigned. General Chavalit selected PM House of 400 Anand was re-installed 09/06: camps and UDD Yongchaiyut of New Aspiration 10/06: Interim Representatives temporarily Military coup government led by leaders called Party was elected PM 02/06: 28 senators move to impeach PM Thaksin, complaint to led by General Surayud off protests General Chulanont was 300 Constitutional Court not reviewed. 11/13: Parliament Ex-PDP leader, C. Srimung, asks Sonthi appointed 02/14: Boonyaratklin LH passes amnesty PM to resign; PM dissolved house bill, UH rejects; General 10/97: New 05/12: PAD began election 03/00: First 02/05: General protests to oppose Constitutional Court 200 Constitution election with Thai 1/14: senator election reconciliation, rules charter 05/92: Law, BE2540 Rak Thai Party in Bangkok 08/07: constitutional amendment for fully Bloodshed promulgated landslide win. elected senators shutdown 02/91: Military Constitution amendments bills Thaksin 01/07: unconstitutional began coup. Anand 04/06: Snap 05/06: The Law, BE2550 unconstituntional 100 Shinawatra was New 03-04/09: UDD organized Panyarachun election with Constitutional Year's promulgated 12/13: PM Yingluck 11/97: General Chavalit appointed PM Thai Rak Thai Court anti-government rallies was installed Eve dissolved House of Reps, resigned and Chuan as PM 01/01: General election won by Thaksin 08/01: PM Thaksin Shinawatra was Party won annulled the bomb 10/08: SC found Thaksin guilty in a land purchase called for early election. DP Leekpai was appointed PM Shinawatra of Thai Rak Thai Party cleared of assets concealment case. Apr-2 blasts conflict of interest case, sentenced him to prison announced poll boycott 0 election 908/4/88 - 2/23/91 91 3/2/9192 - 4/7/92 93 9/23/9294 - 7/13/95 95 7/13/9596 - 11/25/96 97 11/25/96 -98 99 11/9/97 - 2/9/0100 01 02 03 2/9/0104 - 9/19/06 05 06 07 10/1/06 - 1/29/0808 1/29/0809 - 10 12/17/08 - 8/5/1111 12 8/5/1113 - 5/7/14 14 Chatichai Choonhavan - Anan Punyarachun Chuan Leekpai Banharn Silpa-archa 11/9/97 Chuan Leekpai Thaksin Shinawatra General Surayuth 8/9/08 * Abhisit Vejjajiva Yingluck Shinawatra Chart Thai Party 4/7/92-5/24/92** Democrat Party Chart Thai Party Chavalit Democrat Party Thai Rak Thai Party Chulanont Samak Democrat Party Pheu Thai Party
2.1 11.0 Thailand unemployment Thailand CPI (%oyo, RHS)
1.7 7.0
1.3 3.0
0.9 -1.0
0.5 -5.0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
10
Thailand fiscal balance as % of GDP
0
-10 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
10 Thailand real GDP QoQ SAAR Thailand per capita GDP (US$), RHS 7000 6000 5 5000 4000 0 3000 -5 2000 1000 -10 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Note: * = 8/8/08-12/2/08 (Somchai Wongsawat - People's Power Party). ** = 4/7/92-5/24/92 (General Suchinda Kraprayoon) Source: MSCI, Datastream, IMF, J.P. Morgan economics
8 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Valuations: What works in Thailand Figure 8: Adjusting for changes in sector composition: Thailand sector neutral fwd PE Our analysis of valuation discounts the period between 1995 and 2001. 15 Thailand sector neutral fwd PE (based on current sector weights) PEs were inflated prior to the Thai Average baht crisis. Earnings collapsed 14 +1SD post the crisis. -1SD 13 Thailand non-adjusted fwd PE A sector neutral PE adjusts for the impact on valuations of changes in 12 sector composition. Figure 5 highlights the large change in 11 sector composition over time.
The standard deviation of sector 10 neutral PE (1.3) is higher than non- adjusted PE (1.2) 9
The duration of analysis has a 8 significant impact on average or median valuation. From 2005 there 7 was a period of political instability combined with fuel price 6 liberalization and BoT tightening in 01 02 03 04 05 06 07 08 09 10 11 12 13 14 2005. Valuations were low during Source: MSCI, IBES, Datastream, J.P. Morgan this period. The normal post GFC valuation range is 11 to 13. Table 5: Which valuation measures work? Summary of R-Squares from regression analysis Country/Sector 12M fwd PE PE P/B D/Y BY/DY BY/EY LT CVI* To test which valuation ratio is the Materials 6 2 58 3 1 2 58 most useful we calculate the R- Thailand 25 2 29 11 12 7 44 square with valuation indicator as Financials 5 3 38 0 0 10 34 independent variable and one year Energy 32 4 5 26 9 8 34 forward performance as dependent Telecom 28 8 0 0 3 22 34 variable. Utilities 5 3 8 18 17 8 16 IT 41 1 46 3 0 3 5 The results are encouraging for CD 1 1 0 0 2 8 2 Thailand, with the indicators CS 2 1 8 0 0 0 2 producing a high R square (44%) Source: J.P. Morgan. The analysis is done from Jan 2001, Sorted by LT CVI column, Currently IT has 0% weight in Index, Healthcare when combined. The 12M fwd PE sector is not included due to insufficient historical data, Shaded cells indicate regression R2 of more than 20% and have therefore and PB provide sufficient been included in the CVI according to the R2 weighting, * Composite Valuation Indicator (CVI) is essentially the R-sqaure weighted predicting power, having an R- standard deviation from mean average of those valuation indicators which had worked in the past. For more please refer, ‘How cheap squared above 20%. are markets? Introducing the composite valuation indicator’, Mowat et al, 27 June 2005. The 12M fwd PE and DY indicator explains a significant part of the Figure 9: Earnings yield versus bond yield one year forward performance in 5 EY/BY Avg energy sector. Performance in materials, financials and IT is best +1SD -1SD explained by the P/B indicator (Table 5). 4 Equity cheap EY/BY in Thailand is currently trading at its historical average. EY/BY ratio is declining after reaching a high of 2.5 in Feb 14, 3 driven by a fall in earnings yield (PE re-rating).
2
Bonds cheap 1 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Source: J.P. Morgan
9 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Political structure Thailand’s political system is a Constitutional Monarchy The king and his wife Queen Sirikit have four children: where the Prime Minister is the head of the government three daughters and one son (HRH Crown Prince Maha and hereditary Monarch is the head of state. The King Vajiralongkorn, born 28 July 1952). The Prince has little direct power but is a symbol of national identity Vajiralongkorn was given the title “Somdej Phra Boroma and unity. The current monarch is Bhumibol Adulyadej, Orasadhiraj Chao Fah Maha Vajiralongkorn Sayam also known as Rama IX (under Chakri Dynasty). Born on Makutrajakuman” (Crown Prince of Siam) on 28 5 December 1927, the King has reigned since 9 June December 1972 and made heir apparent to the throne in 1946. He is the world’s longest-serving current head of accordance with the Palace Law on Succession of 1924. state and the longest-reigning monarch in Thai history. On 5 December 1977, Princess Sirindhorn was also given the title “Siam Boromrajakumari” (Princess Royal of Thailand is currently under military rule post the 22 May Siam). Although the constitution was later amended to coup led by General Prayuth Chan-ocha. allow the Privy Council to appoint a princess as successor to the throne, this would only occur in the Figure 10: Composition of parliament absence of an heir apparent. This amendment is retained in Section 23 of the 1997 "People's Constitution." This effectively allowed Princess Sirindhorn to potentially be second in line to the throne, but did not affect Prince Vajiralongkorn's status as heir apparent. Recent Pheu Thai constitutions of Thailand have made the amendment of Senators MPs party, 264 (election 77, (constituency the Palace Law of Succession the sole prerogative of the selection 73), 375, party list Democrat reigning king. According to Assoc. Prof. Gothom Arya, 150 125), 500 party, 161 former election commissioner, this allows the reigning king, if he so chooses, to appoint his son or any of his Others, 23 daughters to the throne. Bhum Jai Chart Thai Thai party, 33 Pattana party, 19 See page 44 for political timeline of Thailand Source: The Election commission, The House of Representatives, Note: No. of MPs is as of 9-Sep-13
Table 6: Prime ministers in the office since 1988 Prime Minister Period in the office Ruling party Termination Total Return during reign (US$, CAGR) General Chatichai Choonhavan 4 Aug 1988-9 Dec 1990 Chart Thai Party Resigned 7 General Chatichai Choonhavan 9 Dec 1990-23 Feb 1991 Chart Thai Party Coup 183 Anan Punyarachun 2 Mar 1991-7 Apr 1992 Appointed 10 General Suchinda Kraprayoon 7 Apr 1992-24 May 1992 Appointed Resigned (41) Anan Punyarachun 10 Jun 1992-23 Sep 1992 Appointed House dissolution 38 Chuan Leekpai 23 Sep 1992-13 Jul 1995 Democrat Party House dissolution 36 Banharn Silpa-archa 13 Jul 1995- 25 Nov 1996 Chart Thai Party House dissolution (28) General Chavalit Yongchaiyudh 25 Nov 1996-9 Nov 1997 New Aspiration Party Resigned (69) Chuan Leekpai 9 Nov 1997-9 Feb 2001 Democrat Party House dissolution (11) Thaksin Shinawatra 9 Feb 2001-11 Mar 2005 Thai Rak Thai Party Term expired 28 Thaksin Shinawatra 11 Mar 2005-19 Sep 2006 Thai Rak Thai Party Coup 10 General Surayuth Chulanont 1 Oct 2006-29 Jan 2008 Appointed Term expired 24 Samak Sundaravej 29 Jan 2008-9 Sep 2008 People Power Party Resigned by a court judgement (20) Somchai Wongsawat 18 Sep 2008-2 Dec 2008 People Power Party Resigned by a court judgement (90) Abhisit Vejjajiva 17 Dec 2008-5 Aug 2011 Democrat Party House dissolution 51 Yingluck Shinawatra 5 Aug 2011-22 May 2013 Pheu Thai Party Coup 21 Source: MSCI, Datastream, J.P. Morgan, Performance based on MSCI Thailand Index
10 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Demographics: An ageing nation
Figure 11: Population pyramid Table 7: Thailand rankings Indicators 2012 Rank Population 67.5million 20 Infant Mort. rate 15.9/1000 107 Educ. spend* 3.8% 119 Popn. growth 0.5% 147 Birthrate 1.3% 154 Health spend* 3.9% 169 Source: World Bank, J.P Morgan, * Education and healthcare spend as % of GDP.
Thailand’s demographics are poor. Its working age population has peaked.
Heath and education spend relative to GDP are low. A higher percentage of 40-60 year olds can boost household savings, particularly via compulsory defined contribution pension schemes. This ageing ‘baby-boomer’ effect can increase bond and equity valuations. Source: World Bank, J.P. Morgan Table 8: Total and working age population Millions Population Working age Growth in Total Working Age popn % total working age popn 1990 56 47 84 1995 60 50 83 5.2 2000 63 52 83 5.0 2005 65 54 83 3.5 2010 67 55 82 1.3 2015 68 54 80 (0.6) 2020 69 53 77 (2.3) 2025 70 51 74 (3.2) 2030 70 49 71 (4.0) 2035 69 47 68 (4.4) 2040 69 45 65 (5.1) 2045 68 42 63 (4.8) 2050 66 41 62 (4.1) Source: World Bank, J.P. Morgan
Figure 12: Labor productivity growth (%) 14 12 10 8 6 4 2 0 -2 -4 -6 -8 90 92 94 96 98 00 02 04 06 08 10 12 Source: World Bank, J.P. Morgan
11 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Surprisingly slow urbanization Figure 13: Urbanization rate in the last decades and forecast (CAGR) 60 6 % Urban popn (LHS) Urbanization rate (CAGR) 50 5
40 4
30 3
20 2
10 1
0 0 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Source: United Nations, J.P. Morgan
Plenty of rural votes Figure 14: Urban and rural population as % of total 85 40 Rural Urban (RHS) 80 35
75 30
70 25
65 20
60 15 60 64 68 72 76 80 84 88 92 96 00 04 08 12 Source: World Bank, J.P. Morgan
Homogeneous Figure 15: Ethnic group breakdown Others 11% Chinese 14%
Thai 75%
Source: CIA World fact book, J.P. Morgan
12 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Structure of the economy
Post the 1997 Thai baht crisis Figure 16: GDP composition (expenditure) the country has had a current account surplus. 100% There has been a corresponding decline in investment share of 80% GDP.
60%
40%
20%
0%
Consumption Investment Net external trade -20% 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: J.P. Morgan economics
Figure 17: GDP composition (primary, secondary and tertiary activity)
The key service industries are: 100% wholesale and retail trade, 90% transportation and communication. 80% 70%
The manufacturing industries 60% are: motor vehicles, food 50% products and beverages 40% 30% 20% 10% 0%
Primary Secondary Tertiary
Source: National Economic and Social Development Board, J.P. Morgan calculations.
13 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Electronics and electrical Figure 18: Exports composition (product) appliances industry is the 100 largest component of exports (20%) followed by automotive 90 industry (15%). 80 Other exports comprise mainly Other exports and re-exports (35.6%) of: metal & steel, textile & 70 footwear, machinery & equipment and jewellery. 60
50 Electronics and electrical appliances (19.7%)
40 Automotive (14.9%) 30
20 Petroleum, chemicals and petrochem (13.7%)
10 Agricultural products and fishery (8.7%) Processed foods and beverages (7.4%) 0 05 06 07 08 09 10 11 12 13 14 Source: Bank of Thailand, Number in brackets is current as of March 2014
Diversified export destinations Figure 19: Exports: Trade partners 100
90 ASEAN (24%)
80
70 Rest of the world (20%)
60
50 China+HK (18%)
40 EU (10%) 30 Japan (10%) 20 US (10%) 10 Middle East (6%) 0 Korea (2%) 04 05 06 07 08 09 10 11 12 13 14 Source: Bank of Thailand, Number in brackets is current as of March 2014
14 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Structural Issues in Thailand Improving Thailand’s infrastructure links with Figure 20: Thailand: Export destinations bordering economies could provide a boost to the 18 export sector. High-growth economies in the Cambodia, CLMV EU 16 Laos, Myanmar and Vietnam (CLMV) block make up an increasingly large share of Thailand’s total export 14 market, with the proportion of exports destined for the CLMV climbing to about 14% in 2013 – higher than the 12 total share of exports sent to the European Union, for 10 example. Plans for public investment projects, which have so far stalled amid the political stalemate, include 8 proposals to upgrade Thailand’s transport infrastructure. These will be the key to improving rail and road links 6 01 02 03 04 05 06 07 08 09 10 11 12 13 14 with these high-growth economies, and could provide a Source: CEIC, J.P. Morgan economics, CLMV stands for Cambodia, Laos, Malaysia and further boost to cross-border trade, as well as reduce Vietnam, Y-axis: % share of total, 12mma domestic logistics costs. Figure 21: Malaysia and Thailand: Fixed Investment More broadly, increasing public investment outlays in 45 the context of sustained political uncertainty will be Malaysia Thailand the key to longer-term sustainable growth. Since the 40 collapse in fixed investment around the 1997/8 financial 35 crisis, Thailand has run one of the lowest public investment/GDP ratios in the region. Structural reforms 30 are needed to shift the driver of growth from short-term 25 consumption stimulus (which provided a boost to growth in 2011-2 but quickly rolled off in 2013-4) towards 20 longer-term investment. In the context of an uncertain political economy, sustainable government-led 15 94 96 98 00 02 04 06 08 10 12 14 investment will be important in ensuring Thailand does Source: CEIC, J.P. Morgan economics, Y-axis: % of GDP, sa, 4qma not fall behind other economies in the region in terms of its potential growth. We estimate Thailand’s long-term Figure 22: Thailand: Export composition potential GDP growth at about 4%; but the longer that 30 political uncertainty weighs on the economy, the higher Electronics Autos the chances that potential growth slips. 25
20 Maintaining competitiveness in the manufacturing sector will be crucial. Thailand’s electronics sector has 15 been a key driver of manufacturing growth in the past, accounting for over a quarter of all exports at the turn of 10 the millennium, but falling to around 15% at the 5 beginning of 2014, one of the sharpest declines in the region. This has reflected a shift in demand for products 0 like hard disk drives – which have historically been an 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Source: CEIC, J.P. Morgan economics, Y-axis: % share of total, 12mma important driver of Thailand’s electronics export sector – to higher-tech products like smartphones and tables. Alongside increasing unit labor costs and hikes to the minimum wage, maintaining Thailand’s competitiveness in the manufacturing sector – particularly the tech sector- will be a challenge. One bright spot here is the auto sector, which has benefitted from sustained FDI inflows and the increasing integration of supply chains that have been concentrated in Thailand. Auto exports have climbed, with the share of total auto exports now on par with electronics shipments.
15 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
The Thai Baht Crisis The currency (THB/USD): Figure 23: EM ASEAN FX devaluation 1992-96 range 24.5 to 25.7 120 Strongest 23.2 (17 June 1997) 100 Weakest 55.5 (12 January 1998) 80 Shrinking FX reserves (July 1997) Official reserves US$30billion 60 THB Short forward position US$29billion 40 MYR Net reserves US$1billion PHP IDR The financial system 20 1997 private sector loans 116%/GDP (doubled from 0 1990) 94 95 96 97 98 99 00 Source: Bloomberg, J.P. Morgan NPLs percentage of total loans; ’96 13%, 97 15% and 98 25% Figure 24: Thailand FX reserves (US$bn) 2Q97 foreign liabilities US$100billion of which bank 45 foreign liabilities were US$86billion Official reserves 40 Net FX reserves The equity market 35 MSCI Thailand peak 669 (4 January 1994) 30 The bear market started in June 1996 25 End 1996 334, 40% below 1H96 average 550 20 Low 72 (4 September 1998) 15 Dollar loss from 1H96 average 93% 10 Dollar return from low to end 99 200% 5 SET high 1753and low 207 0 The economy: Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Source: Bank of Thailand, J.P. Morgan Current account deficit 95/96 8.5%/GDP Trade surplus required in 1996 to stabilize Thailand's Figure 25: Balance of payments foreign debt was 6.9%/GDP...the highest in Asia US$bn, %GDP
1991-95 GDP growth range 8.1 to 8.9%oya $80 USD bn % of GDP 0% 1990-65 investment rate range 39.9 to 42.8%/GDP $60 -20% -40% 3Q98 GDP -13.9%oya $40 FY97/98 GDP -1.4/ -10.5%oya respectively -60% $20 -80% Car sales 1996 = 589,126 $0 -100% Car sales 1998 = 144,065 -$20 -120% -140% -$40 Thailand led the Asian financial crisis. An exchange rate -160% pegged to the US dollar resulted in rapid appreciation in -$60 -180% the real effective exchange rate. The current account -$80 -200% deficit expanded through the 1990s. CA FX Reserves Capital Account The Bank of Thailand used forward contracts to support Official Flows E&O Cum. CA/GDP (RHS) the Baht. The use of forwards meant that the depletion of Source: DataStream the official FX reserves appeared modest. The central bank had also used the Financial Institution Development Fund to support failing finance companies. In May 2007 the Thai government was forced to renege on promises to protect creditors to finance companies. This triggered capital flight.
16 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
The savings or current account deficit was funded Table 9: Thai financial crisis timeline primarily by short-term bank loans. 28 December China devalues the Renminbi by 33% (CNY/USD 5.82 to 1993 8.72) Figure 26: Large external banking liabilities January 94 to Fed Fund Target rate increases from 3 to 6% February 95 $80 60% s Cross-border Foreign Bank 16 September EM equities high for the 1990s (MXEF 587). It was the 15 d
n Credit as % of a $70 Lending,US$bn 1994 July 2005 before EM next exceeded this level. s
u GDP 50% o h $60 T 20 December Mexican government increases the trading band for the 40% 1994 Peso. MXN/USD moves from 3.44 to 7.45 in March 1995. $50 Investors wake up to the risk in EMs $40 30% 14 May 1997 Bank of Thailand intervention accelerates $30 02 July 1997 Thailand moves to a managed float 20% $20 22 July 1997 IMF warns Thailand 10% 05 August 1997 Thai government closes 42 finance companies $10 11 August 1997 First rescue package for Thailand $- 0% 08 December Another 56 Thai finance companies closed 1997 Banks Public Corporate % of GDP Source: www.pbs.org, US Federal Reserve Source: BIS Note that funding costs were increasing as RoEs Poor capital allocation depressed returns. This decreased declined. the appeal of Thai equity assets. Figure 29: Prime Lending Rate (%) Figure 27: Thailand RoE (%) 17 25 Thailand US 20 15 15 13 10 11 5 9 0 -5 7
-10 5 92 93 94 95 96 97 98 99 00 Jan-91 Feb-92 Mar-93 May-94 Jun-95 Jul-96 Aug-97 Oct-98 Nov-99 Dec-00 Source: MSCI, Datastream, J.P. Morgan, RoE reached a low of -47% in 2Q98. Source: Datastream, Bloomberg, J.P. Morgan
Finance One was the largest finance company in It was 1999 before NPLs peaked at nearly half of loans. Thailand. Ahead of the crisis financials were nearly half the market. Figure 30: NPLs peak at 45% in 1999 50.0% Figure 28: The mighty fall: Finance One share price 145% 45.0% 135% 40.0% 210 125% 35.0% 30.0% 180 115% 25.0% 150 105% 20.0% 95% 15.0% 120 10.0% 85% 5.0% 90 75% 0.0% 60
30 LDR 3M Interbank Rates (RHS) NPL Ratio (RHS)
0 Source: Datastream Jan-90 Feb-91 Mar-92 May-93 Jun-94 Aug-95 Sep-96 Nov-97 Source: Datastream, J.P. Morgan
17 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Sector & Industry composition (Market Cap, Revenue and Earnings)
MSCI Thailand has the banks as the Table 10: MSCI Thailand sector composition largest sector, by market cap as well Sector Contribution (%) as by profitability. That is followed Mkt Cap Revenue Earnings by energy sector led by PTT and the Financials 35% 7% 35% group companies. That is followed Energy 21% 58% 34% by material, basically the Siam Materials 11% 18% 14% Cement. Consumers (stable and Cons. Staples 10% 10% 2% discretionary) and telecom have Telecom 10% 4% 5% relatively equal contributions in Industrials 5% 1% 4% market cap as well as profitability. Cons. Disc. 4% 1% 3% Health Care 2% 1% 1% Utilities 1% 1% 2% Source: MSCI, Datastream, J.P. Morgan, Sorted by Market Cap
Table 11: MSCI Thailand industry composition Industry Contribution (%) Mkt Cap Revenue Earnings Diversified Banks 33% 7% 34% Integrated Oil & Gas 9% 42% 19% Oil & Gas E&P 8% 3% 12% Wireless Telecom 8% 2% 7% Food Retail 7% 4% 2% Const. Materials 6% 6% 7% Commodity Chem 5% 12% 7% Airport Svs 3% 1% 3% Oil & Gas R&M 3% 11% 3% Packaged Foods & Meats 3% 6% 0% Real Estate Operating Co 2% 0% 1% Integrated Telecom 2% 1% -2% Railroads 2% 0% 0% Health Care Facilities 2% 1% 1% Broadcasting 2% 0% 1% Hotels, Resorts & Cruise Lines 2% 1% 1% IPP & Energy Trans 1% 1% 2% Home Improvement Retail 1% 1% 1% Coal & Cons. Fuels 1% 2% 1% Source: MSCI, Datastream, J.P. Morgan, Sorted by Market Cap
In following sections, we will highlight key drivers for main industries in the market.
Banks: We highlight system long-term deposit & loan growth, asset quality, profitability, and sector compositions. Thai banks are domestic-oriented on both loans and funding. Top four banks share largely ¾ of the market.
Property: we highlight trend of new property launches and prices. Momentum of new launches are largely driven by macro outlook. Condo demand has risen on the expansion of mass transit system. Property prices have largely been stable due to ample of land availability and relatively stable input costs.
Consumer: we highlight penetration rate of modern trade in Thailand. Modern trade has gained share from traditional kinds of trade. Retailers have consistently expanded their store networks in the past five years. Farm income and tourist arrivals are key top line drivers for the sector.
Energy & cement: Fuel, power, and cement consumption in Thailand are strongly correlated to GDP growth. Growth has been in low single digit range in the past few years. With declining natural gas reserve locally, Thailand has imported more gas. The cement industry has been in overcapacity ever since the 1997 Asian crisis.
18 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Key sector data
Deposit growth is generally in- Banking line with loan growth. Deposits Figure 31: Deposit growth remain the key funding source for banks 30% 25% 20% 15% 10% 5% 0% -5% 7 7 7 7 8 8 8 8 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2 3 3 3 3 4 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 Depo growth
Source: Company reports, J.P. Morgan calculations.
Industry loan growth was Figure 32: Loan growth modest post the 1997 financial 25% crisis. Momentum only turned positive in 2H10 post the global 20% financial crisis and riots in 15% Bangkok (May10). Key loan growth drivers are retail and 10% SME. 5% 0% -5% 7 7 7 7 8 8 8 8 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2 3 3 3 3 4 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1
Loan growth
Source: Company reports, J.P. Morgan calculations.
Banks have consistently Figure 33: NPL ratio managed down NPL as the 10.0% economy improved. However, the trend began to deteriorate in 8.0% 2H13 due to weak domestic conditions as well as a 6.0% vulnerable global economy. 4.0%
2.0%
0.0% 7 7 7 7 8 8 8 8 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2 3 3 3 3 4 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1
NPL ratio
Source: Company reports, J.P. Morgan calculations.
19 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Figure 34: Net interest margin NIM has relatively been stable 4.0% post 2008. While open to BOT’s 3.8% suggestion and policy direction, banks control their own lending 3.6% & deposit interest rates. 3.4% 3.2% 3.0% 2.8% 2.6% 2.4% 7 7 7 7 8 8 8 8 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2 3 3 3 3 4 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1
NIM
Source: Company reports, J.P. Morgan calculations.
The big 4 control a 72% share of Figure 35: Loan market share commercial banking system loans… KTB KK 19% 2% TISCO SCB 3% 19% TMB 5%
TBANK BBL 9% 18% BAY 9% KBANK 16%
Source: Company reports and J.P. Morgan.
…and 75% of system deposits. Figure 36: Deposit market share
KK KTB TISCO 2% 20% 2% BBL 20% TMB 6% TBANK 7% SCB BAY 18% 8% KBANK 17%
Source: Company reports and J.P. Morgan.
20 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Thai banks usually run LDRs in Figure 37: Banks' loans/deposits ratio 85-95% range. This is in contrast KK 134.4% to auto lenders which have higher portion of non-deposit TISCO 123.5% liabilities e.g. fixed-rate TBANK 115.6% debentures. This is to manage BAY 107.0% asset-liability spread as auto SCB 99.5% loan rate is fixed through the Industry 97.3% term. KBANK 92.1% BBL 91.8% KTB 91.1% TMB 88.4% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0%
Source: Company reports and J.P. Morgan.
Banking sector loans are well Figure 38: Loan breakdown balanced between corporate, SME, and retail. Among 100% individual banks, however, there 12 Others 90% 15 14 are deviations. BAY, SCB, TCAP, 21 19 11 KK, and TISCO have relatively 80% 9 larger retail loan exposure. 44 16 Housing loans 70% 14 13 60 16 24 60% 13 83 78 50% 23 Public utilities and 13 13 services 40% 8 30% 49 59 11 48 Manufacturing & trading 20% 30 34 8 26 1 10% 12 6 7 Agri & mining 0% 1 3 2 2 1 2 2 BAY BBL KBANK KTB SCB TMB TCAP KK TISCO
100% 0 1 10 International 90% 16 15 13 20 11 27 80% 11 18 12 Government 70% 27 60% 25 28 42 13 Housing 20 20 50% 26 40% SME
30% 53 17 46 40 20 Corp 20% 37 24 31 10%
0% BAY BBL KBANK KTB SCB TMB TCAP KK TISCO Source: Company reports, J.P. Morgan calculations.
21 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Property Property trend has been strong Figure 39: New project launches (units) with developers able to launch 140,000 and sell new units. 120,000
100,000
80,000
60,000
40,000
20,000
0
New units launched
Source: Agency for Real Estate Agency
Condo demand helped by mass Figure 40: More condos…..Breakdown of new launches transit (traffic jams), high fuel 80% costs, etc. 70% 60% 50% 40% 30% 20% 10% Condo Landed properties 0%
Source: Agency for Real Estate Agency
Ample land equals affordable Figure 41: Average unit price property 5.0 Narrow price range 4.5 Volume not price market 4.0 3.5 3.5 3.0 2.9 2.5 2.5 2.0 1.5 1.0 0.5 0.0
Landed properties Condo Overall
Source: Agency for Real Estate Agency
22 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Consumer Modern trade penetration in Figure 42: Modern trade penetration Thailand is ahead of other ASEAN countries, but still lower 100% than 60-70% in developed 90% countries. 80% 59% 58% 57% 70% 66% 64% 62% 62% 60% 60% Traditional 50% 40% 30% Modern 41% 42% 43% 20% 34% 36% 38% 38% 40% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013
Source: Euromonitor
Tourist multiplier effect on local Figure 43: Tourist arrivals consumption % oya Thousands, sa
Many malls cater for tourists. 80 Level 3000
60 2500
40 2000
20 1500
0 1000
-20 500 Change -40 0 05 06 07 08 09 10 11 12 13 14
Source: Tourism Authority of Thailand, CEIC, J.P. Morgan calculations.
Private consumption is highly Figure 44: Private consumption vs Farm income correlated with farm income PCE Farm income (RHS) Rice subsidy in 2012 broke the 12% 50% relationship 10% 40% 8% 30% 6% 4% 20% 2% 10% 0% 0% -2% -10% -4% Broken relationship on min -20% -6% wage hike -8% -30% 7 8 9 0 1 2 3 4 6 6 7 7 8 8 9 9 0 0 1 1 2 2 3 3 0 0 0 1 1 1 1 1 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 ------l l l l l l l l r r r r r r r r v v v v v v v v u u u u u u u u a a a a a a a a o o o o o o o o J J J J J J J J M M M M M M M M N N N N N N N N
Source: Bank of Thailand, Office of the Agricultural Economics.
23 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Aggressive store expansion, Figure 45: Retail sales area - for six stocks under our coverage retail sales area of key listed companies + 10% CAGR (2008- Estimated sales area (sq.m. '000) % y/y (RHS) 4,500 16.0% 13) 15% 4,000 14.0% 13% 3,500 12% 12.0% 3,000 10% 10.0% 2,500 8% 8.0% 2,000 4,096 3,623 3,224 6.0% 1,500 5% 2,808 1,000 2,115 2,317 4.0% 500 2.0% 0 0.0% 2009 2010 2011 2012 2013 2014F
Source: Company data, J.P. Morgan calculations
Energy and cement Domestic petroleum products Figure 46: Domestic petroleum products consumption leveraged to Thai GDP growth consumption is highly correlated 15% Political crisis + with GDP Military coup + 10% Petroleum product demand will GFC contract during prolonged 5% political crisis 0% -5% -10% -15% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Real GDP Growth Rate (%) Petroleum consumption growth
Source: NEDB, EPPO.
Highly dependent on natural gas Figure 47: Domestic gas production and increasing dependence on gas imports (45% primary commercial energy 6.0 D consumption) F Domestic production CAGR = 6% C
S 5.0
Natural gas reserves in Gulf of M Imports CAGR = 15% 1.0 1.0 M 0.9 Thailand are declining resulting s 4.0 0.9 d
n 0.8 in more imported gas a 0.8
s 3.0 0.9
u 0.9 0.9 o 0.7 0.7 h 0.5 0.6 T 0.2 4.0 2.0 3.5 3.6 4.0 2.5 2.8 3.0 1.0 1.9 1.9 2.0 2.1 2.2 2.3 2.4 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Domestic Production Import
Source: EPPO.
24 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Figure 48: Domestic power consumption leveraged to Thai GDP growth Domestic power consumption is 12.0% 10.4% highly correlated to Thai GDP 10.0% 8.7% 7.6% growth. 6.9% 8.0% 5.3% 5.5% 6.0% 4.1% 4.0% 1.8% 1.6% 2.0% 7.1% 6.3% 4.6% 5.1% 5.0% 2.5% -0.3% 7.8% -00..13%% 6.5% 2.9% 0.0% -2.0% -2.3% -4.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Real GDP Growth Rate (%) Power Consumption Growth (%)
Source: EPPO.
Gas-fired power plants account Figure 49: Domestic natural gas consumption leveraged to Thai GDP growth for around 2/3rd of total power 25.0% Political crisis + generation, and almost 60% of 20.0% Military coup + total natural gas consumption. GFC 15.0% Domestic natural gas sales are 10.0% therefore correlated to GDP 5.0% 0.0% -5.0% -10.0% -15.0% 1991 1995 1999 2003 2007 2011
Real GDP Growth Rate (%) Natural gas consumption growth
Source: NEDB, EPPO.
Domestic cement demand Figure 50: Domestic cement demand leveraged to Thai GDP growth 10.0% 23% 25% growth is strongly correlated Political crisis + military with GDP growth 8.0% coup + GFC 20% 12% Demand declines significantly 6.0% 15% 11% 10% during prolonged political crisis 9% 4.0% 6% 7% 10% and tends to recover relatively 3% 2.0% 1% 5% slowly 2.2% 5.3% 7.1% 6.3% 4.6% 5.1% 5.0% 2.5% 7.8% 6.5% 2.9% -1% -2% 0.1% 0.0% 0% -6% -6% -2.3% -2.0% -5%
-4.0% -10% 2001 2003 2005 2007 2009 2011 2013 Real GDP Growth (%) Domestic cement sales Growth (%)
Source: BOT, SCC.
The cement industry has been in Figure 51: Domestic cement industry remains in overcapacity since the 1997 Asia crisis overcapacity ever since the 1997 Industry Capacity 60 Asian crisis 85-90% Utilization 50 Low margin exports should decline as domestic demand 40 recovers 30 Domestic Demand 20
10
Exports 0 1996 1998 2000 2002 2004 2006 2008 2010 2012 Source: BOT, SCC.
25 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Corporate Shareholding AC Advanced Info Services Princy Singh Thailand’s largest mobile phone operator. Found in April 1986 by the ousted former (65) 6882-2746 [email protected]. Morgan.com Prime Ministry Thaksin Shinawatra. Then was sold to Temasek in 2006. J.P. Morgan Securities Singapore Private Limited
Singtel Strategic State Street Bank & Littledown Shin Corp. Thai NVDR Co. Ltd. HSBC (Singapore) Free Float (Others) Investment Trust Nominees
40.4% 23.3% 6.3% 3.6% 2.8% 2.2% 21.4%
Advanced Info Services
100% Advanced Contact Center 99.9% AIS International Network 100% Advanced Broadband Co Ltd Co Ltd Network Co Ltd
100% Mobile From Advance Co 100% Advanced Magic Card Co. Ltd Ltd.
98.6% 100% Wireless Device Supply Digital Phone Co Ltd Co Ltd.
50.2% Advanced Datanetwork 100% Super Broadband Communications Co Ltd Network Co Ltd.
100% 100% Advanced Wireless Advanced Mpay Co Ltd. Network Co Ltd
99.9% AIS Wireless 100% Communication Network MIMO Tech Co Ltd Co Ltd
99.9% 20% Clearing House for AIS Wire Network Co Ltd Number Portability Co Ltd
Source: Company, Bloomberg, Stock Exchange of Thailand.
AC Bank of Ayudhya Anne Jirajariyavech, CFA Thailand’s fifth largest commercial bank. Found in 1945 by the Ratanarak family. (66-2) 684-2684 [email protected]. Morgan.com In 2007 it was sold to GE Capital which later in 2013 sold it to The Bank of Tokyo - JPMorgan Securities (Thailand) Limited Mitsubishi UFJ.
Ratanarak Family
Bangkok BBTV Asset Tun Tun GE Capital Morgan Stanley & BBTV Satelvision Thai NVDR Co Broadcasting and Management Co Mahachoke Co Rungrueng Co International Co International Free float Co Ltd* Ltd Television Co Ltd* Ltd* Ltd* Ltd* Holding Corp Plc 2.6% 2.7% 2.7% 2.7% 2.6% 25.3% 13.7% 4% 43.5%
Bank of Ayudhya
100% Krungsriayudhya Card Co 100% Ayudhya Capital Auto Ltd Lease Public Co Ltd
99.8% Ayudhya Auto Lease Public 100% Ayudhya Capital Services Co Ltd Co Ltd
100% Ayudhya Asset Management Co Ltd
100% Ayudhya Development Leasing Co Ltd
98.7% Krungsri Securities Public Co Ltd
76.6% Ayudhya Fund Management Co Ltd
Source: Company, Bloomberg, Stock Exchange of Thailand. Note: * shareholding of Ratanarak Family in these companies is not available
26 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] AC Bangkok Bank Anne Jirajariyavech, CFA Thailand’s largest commercial bank. Found in 1944 by Chin Sophonpanich. (66-2) 684-2684 [email protected]. Morgan.com Chartsiri Sophonpanich, the grandson of the founder, is the current president. JPMorgan Securities (Thailand) Limited
Thai NVDR Co State Street State Street BNY Mellon Morgan Stanley & HSBC (Singapore) Bangkok Free Float Ltd Bank & Trust Bank Europe Nominees Ltd Co International Plc Nominees Pte Ltd Insurance Plc
30% 4.3% 3.2% 2.5% 2.4% 1.9% 1.8% 54%
Bangkok Bank
100% 39% Bangkok Sakura Software 30% 21.6% Srithepthai Plaschem Co Bangkok Bank Berhad Processing Centre Co Ltd Service Co Ltd Ltd
100% 35.9% BSL Leasing Company 30% MC. Private Equity BBL Cayman Ltd Limited Partners Asia
100% Sinsubtawee Assets 33.8% Quality Houses Property 30% MC. Private Equity Mgmt. Co Ltd Fund Management (Private)
100% Bangkok Bank (China) Co 33.3% 27.4% Ong Asia Ltd National ITMX Co Ltd Ltd
99.7% Buanuang Securities 33.3% Smart Loyalty (Thailand) 25.9% Bangkok Sakura Leasing Public Co. Ltd. Co Ltd Co Ltd
75% BBL Asset Management 33.3% 24.9% Local Telephone Co Ltd WTA (Thailand) Co Ltd Co Ltd.
59.8% Thai Precious 31.1% Tuntex Petrochemical 24.5% Ong & Co Ltd Manufacturing Co Ltd (Thailand) PCL
Source: Company, Bloomberg, Stock Exchange of Thailand. Bangkok Dusit Medical Services Pcl
Dr. Prasert Tongtang Family Bangkok Airways Viriya Insurance Bangkok Bank Free Float Prasarttong-Osoth
18.8% 15.4% 6.8% 6.2% 2.3% 50.6%
Bangkok Dusit Medical Services Pcl
92.9% Samitivej Pcl
98.2% Prasit Patana PCL
20.3% Bumrungrad Hospital PCL
Source: Company, Bloomberg, Stock Exchange of Thailand.
27 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Central Group A family-owned (Chirathivat family) conglomerate holding company involving in merchandising, real estate, retailing, hospitality and restaurants.
Chirathivat Family
Central Group*
43.4% 100% 100% 100% 27.8% CPN Retail Growth Central Plaza Central World Hotel 100% Robinson Allied Newspapers Central Pattana Leasehold Property Fund (California) Ltd Co Ltd Sukhumvit Co., Ltd. Ltd
99.9% Robinson Nakarin 45.4% 90% 100% Central 100% Central 99.9% Central Plaza CentralWorld Company Sukhontha Co Restaurants Group Co., Ltd. World Press Co Ltd Hotel Limited Ltd Co., Ltd. 99.8% Robinson Ratchada 31.6% Robinson Co., Ltd. 100% 100% CPN Construction 100% The Samui Beach 99.9% Central Koh Kood Post International Department Management Co., Ltd. Co Ltd Hotel Media Co., Ltd. Store 99.4% Robinson Rajdamri Co., Ltd. Central Pattana Central Hotel 50% Bangkok Post and 20.6% 100% 100% 99.3% Karon Phuket Hotel Post Publishing Developement Company Management Co Martin Clients and Co., Ltd Siam Retail Limited Ltd 24% Development Co Associates Co Ltd Ltd 84% 50% 40% 99.9% CPN Global Company Thai Franchising Kata Hotel Phuket 24% Web Advisory Co Limited Co Ltd Co., Ltd Square Ritz Plaza Ltd Co Ltd
84% Central Fast 25% Centara Hotels and 49% 25% CPN Commercial Growth 100% CR (Thailand) Co Food Group Co Resorts Leasehold Flash News Co Ltd Leasehold Property Fund Ltd Ltd Property Fund
Centara 40% Central Hua Hin 51% 63.8% 100% International Power Buy Co Ltd Post-IM Plus Resort Hotel Co Management Co., Company Limited Ltd Ltd. 29.2% CRC Sports Co Ltd 100% 84% Food Novelties 100% Centara Learning Post News Co Ltd Centre Co., Ltd. Company Limited 50% CR Ratchaburi (Thailand) Co Ltd 100% Central Samui 100% Post New Media Beach Resort Co Company Limited Ltd 33.3% RST Sky Bridge Co Ltd 63.9% Central Hua-Hin Robinson Beach Resort Co 100% Department Store Ltd (Vietnam) Joint Stock Co
Source: Company, Bloomberg. Source: Company, Bloomberg, Stock Exchange of Thailand. Note: * shareholding of Chirathivat Family in this company is not available. AC Charoen Pokphand Group Kae Pornpunnarath, CFA One of Asia’s largest conglomerates involved in agri, food, retail, (66-2) 684-2679 [email protected]. Morgan.com telecommunication, and real estate. Founded in 1921 by Chearavanont Family. JPMorgan Securities (Thailand) Limited
Chearavanont Family
Charoen Pokphand Group*
40.1% 100% C.P. Merchandising Co 100% 100% Charoen Pokphand Foods Lotus Distribution Telecom Holding Ltd Investment Limited Company Limited
43.8% 100% 100% 100% C.P. All CPF Investment Limited Counter Service Co Ltd True Internet Co Ltd
42.9% 100% 42.9% 100% Siam Makro Bangkok Feedmill Co Ltd Siam Makro Public True Visions Public Company Limited Company Limited
42.6% 99.4% Bangkok Produce 49% 100% True Corp Siam Makro Holding True Life Plus Company Merchandising Pcl (Thailand) Ltd. Limited
1.8% 75% Bangkok Livestock 100% 100% Vinythai True International Processing Co Ltd OHT Co., Ltd. Gateway Co., Ltd.
100% CPF Trading Company 100% Limited Siam Food Services Ltd
100% 100% CPF (Thailand) Pcl Vina Siam Food Co Ltd
100% Chester's Food Company Limited
Source: Company, Bloomberg. Source: Company, Bloomberg, Stock Exchange of Thailand. Note: * shareholding of Chearavanont Family in this company is not available.
28 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] IRPC Public Company
PTT Public Govt. Savings Bank Govt. Pension Fund Thai NVDR Co Ltd Bangkok Bank Free Float
38.5% 9.5% 5.8% 4.7% 2.5% 39%
IRPC Public Company
100% 99.5% Thai ABS Co., Ltd. IRPC Service Co., Ltd.
100% 99% International Plastic IRPC Oil Co., Ltd. Trading Co., Ltd.
99% 100% IRPC Polyol Co., Ltd. Technology IRPC Co Ltd
100% Thai Polyurethane 100% Rayong Energy Co Ltd Industry Co., Ltd.
99% 99.9% Rayong Port Service Co IRPC Energy Co., Ltd. Ltd
100% Rayong Tank Terminal 99.3% TPI Infrastructure Co Ltd Co., Ltd.
100% TPI Aromatics PCL
Source: Company, Bloomberg, Stock Exchange of Thailand.
AC KASIKORNBANK Anne Jirajariyavech, CFA Formerly named the Thai Farmer Bank. Found in 1945 by Lamsum family. (66-2) 684-2684 [email protected]. Morgan.com Banthoon Lamsam is currently the Chairman of the Board and Chief Executive JPMorgan Securities (Thailand) Limited Officer.
State Street Bank Chase Nominees State Street Bank Thai NVDR Co Ltd. Free Float Europe Ltd Ltd 42 and Trust Co
26.8% 8.5% 4.9% 4.4% 55.4%
KASIKORNBANK
100% Thai Farmers 100% International (Cayman) Progress Training Co Ltd Co Ltd
Thai Farmers 100% 100% Kasikorn Securities Public International Finance Co Co., Ltd. Ltd
100% Thai Farmers Research 100% Kasikorn Asset Mgmt. Center Co Ltd Co., Ltd.
100% Phethai Asset Mgmt. Co., 100% Thanyathanathavee Co Ltd. Ltd
99.9% 100% Thanyathamrongkij Co Asset Plus Securities PCL Ltd
100% Kasikorn Leasing Co.Ltd
51% Muang Thai Group Holding Co Ltd
Source: Company, Bloomberg, Stock Exchange of Thailand.
29 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] AC Krung Thai Bank Anne Jirajariyavech, CFA (66-2) 684-2684 [email protected]. Morgan.com JPMorgan Securities (Thailand) Limited
The Financial State Street Bank Institutions Dvlpmt. Thai NDVR Co Ltd. Vayupak Fund Free Float Ltd. Fund 55.1% 5.8% 3.9% 3.1% 32.1%
Krung Thai Bank
100% 100% Krug Thai Asset KTB (Cayman) Ltd Management Plc.
100% Krung Thai Computer 100% FBCB Asset Management Services Co Ltd Co Ltd
100% Krung Thai Land and 100% KTB leasing Co Ltd. House Co Ltd
100% 50% Krung Thai Law Co Ltd KTB Securities Co Ltd
49% 50% KrugThai Card PLC TSEC Securities Co Ltd
100% Krung Thailand Holding 100% KTB Advisory Co Ltd Co Ltd
100% Krung Thai General 100% KTB Capital Holding Co Business Services Ltd
Source: Company, Bloomberg, Stock Exchange of Thailand.
AC Land & House Pcl Anne Jirajariyavech, CFA Leader in residential development business. Found in 1973 by Piangjai Hanpanich. (66-2) 684-2684 [email protected]. Morgan.com Her son, Anant Asavabhokhin, is currently the CEO of the company. JPMorgan Securities (Thailand) Limited
Mr. Anant Chase Nominees Thai NVDR Co Ltd GIC Private Ltd - C May Land Co Ltd Free Float Asavabhokhin Ltd - 42
23.8% 18.2% 16.1% 5.6% 4.8% 31.5%
Land & House Pcl
25% 25.7% Quality Houses Property Quality Houses Pcl Fund
40.9% LH Financial Group Public 25.7% Company Limited
49.9% Land & Houses Property 100% Market Village Co., Ltd. Fund
49% Land & Houses Property 100% Home Product Center and Loan Fund II (Malaysia) Sdn Bhd.
30% 30.2% 100% Mega Home Center Co., Home Product Center Pcl Ltd.
100% DC Service Center Co., Ltd.
Source: Company, Bloomberg, Stock Exchange of Thailand.
30 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] AC Pruksa Real Estate Plc Anne Jirajariyavech, CFA Founded by Thongma Vijitpongpun, current CEO, in 1993 to develop residential (66-2) 684-2684 [email protected]. Morgan.com units (mainly townhouses) for low-income earners. JPMorgan Securities (Thailand) Limited
Mr. Thongma Mrs. Rattana Chase Nominees Ltd HSBC (Singapore) Thai NVDR Co Ltd Free Float Vijitpongpun & family Promsawad 28 Nominees Pte Ltd
70.2% 3.6% 2.9% 2.8% 1.3% 19.2%
Pruksa Real Estate Plc
99.9% Kaysorn Construction Co Ltd
100% Putthachart Estate Co Ltd
100% Pruksa Overseas Co Ltd
100% Pruksa International Co Ltd
Source: Company, Bloomberg, Stock Exchange of Thailand.
AC PTT Scott L Darling Thailand’s state-owned oil and gas company. Founded in 1978 and privatized in (852) 2800 8578 [email protected]. Morgan.com 2001. J.P. Morgan Securities (Asia Pacific) Limited
Chase Nominees HSBC (Singapore) Ministry of Finance Vayupak Fund Thai NVDR Co Ltd Free Float Ltd 42 Nominees Pte Ltd
51.1% 15.3% 4.1% 2.5% 2.2% 24.8%
PTT
65.3% 100% PTT Green Energy Co., 28.5% Bangchak Petroleum PTTEP Ltd. Public Co., Ltd.
100% SUBIC BAY ENERGY 100% PTT Tank Terminal Co., 37.4% IRPC Public Co., Ltd. CO., LTD. Ltd.
33.2% THAI PETROLEUM 100% PTT Retail Business 100% PTT International PIPELINE CO., LTD. Company Limited Company Limited
49.1% THAI OIL PUBLIC CO., 100% 100% PTT PMMA Company PTT (Cambodia) Co., Ltd. LTD. Limited
STAR PETROLEUM 36% 100% PTT INTERNATIONAL 100% REFINING COMPANY PTT Oil Myanmar Co.,Ltd. TRADING PTE., LTD. LIMITED
PTT POLYMER 50% 100% 100% PTT Regional Treasury MARKETING COMPANY PTT LNG Co., Ltd. Center LIMITED
Combined Heat and 100% 100% PTT Polymer Marketing Power Producing Co., Ltd. Company Limited Source: Company, Bloomberg, Stock Exchange of Thailand.
31 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] AC PTT Exploration and Production PCL. Scott L Darling (852) 2800 8578 [email protected]. Morgan.com J.P. Morgan Securities (Asia Pacific) Limited
State Street Bank & HSBC (Singapore) State Street Bank PTT Thai NVDR Co. Ltd. Free Float Trust Nominees Pte Ltd Europe Ltd
65.3% 3.2% 2.5% 2.2% 1.8% 25%
PTT Exploration and Production PCL.
100% 49% PTTEP International PTTEP Siam
75% PTTEP Offshore 50% Energy Complex Investment Co Ltd
100% 20% PTB Partner Co Ltd PTT ICT Solutions
100% PTTEP MEA Limited
100% PTTEP Australasia (Ashmore Cartier) Pty Ltd.
50% CPOC Co Ltd
25% PTTEP Services
Source: Company, Bloomberg, Stock Exchange of Thailand.
AC PTT Global Chemical Samuel Lee, CFA (852) 2800-8536 [email protected]. Morgan.com J.P. Morgan Securities (Asia Pacific) Limited
State Street Bangkok Thai NVDR HSBC (Singapore) HMC Siam PTT Bank & Synthetics Co. Free float Co Ltd Nominees Pte Ltd Polymers Cement Trust Ltd. 48.9% 8.1% 2.4% 1.8% 1.8% 1.8% 1% 34.1%
PTT Global Chemical
100% 51% TOC Glycol Co Ltd Thai Tank Terminal
100% 60% PTT Management and Bio Creation Co., Ltd. Engineering Co Ltd
NPC Safety and 100% 54% Auria BioChemicals Environmental Service Company Limited Co.,Ltd.
100% Thai Oleochemical 25% Vinythai Pcl Co.,Ltd.
75% Bio Spectrum Co., Ltd.
100% PTT Chemical International Private Limited
100% PTT Phenol Company Limited
Source: Company, Bloomberg, Stock Exchange of Thailand.
32 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] AC Siam Commercial Bank Anne Jirajariyavech, CFA Thailand’s first bank. Founded in 1904, named as Book Club, by Prince Mahisara (66-2) 684-2684 [email protected]. Morgan.com Rajaharudaya (a brother of King Chulalongkorn – Rama V). Crown Property JPMorgan Securities (Thailand) Limited Bureau is the major shareholder.
Crown Property Chase Nominee Ltd Tun Laddawan Co Vayupak Fund Free Float Bureau 42 Ltd
21.3% 23.2% 5.1% 2.4% 48%
Siam Commercial Bank
100% SCB Asset Management Co Ltd
100% SCB Securities Co., Ltd.
94.7% Siam Commercial New York Life Insurance Pcl
60.7% Samaggi Insurance Pcl
99.1% Siam Commercial Leasing Pcl
60.9% The Siam Commercial Samaggi Insurance Public Cpmpany Limited Source: Company, Bloomberg, Stock Exchange of Thailand. TCC Holding Co Ltd One of Thailand's largest conglomerate holding companies. Founded in 1960 by Charoen Sirivadhanabhakdi who remains active in managing the group business. Involved in beverages, merchandising, insurance, real estate, and agricultural. Sons and daughters also actively managing businesses under the group.
Sirivadhanabhakdi Family
TCC Holding Co Ltd*
98.6% 45.3% 100% Thai Beverage Beer Thai (1991) Pcl*** Thai Glass Industries Pcl Oishi Ramen Co Ltd
98.3% 70% Beerthip Brewery (1991) Berli Jucker Specialties 100% Berli Jucker Oishi Trading Co Ltd Co Ltd*** Co Ltd
100% Cosmos Brewery Berli Jucker Foods 100% Oishi International TCC Land** (Thailand) Co Ltd*** Limited Holdings Ltd
49% Southeast Insurance** SangSom Co Ltd*** Berli Dynaplast Co Ltd
92.2% Southeast Life Sura Bangyikhan Co Berli Jucker Cellox Ltd Insurance** Ltd***
100% Red Bull Distillery (1988) Southeast Capital** Rubia Investments Ltd Co Ltd***
99.8% 66.3% Indara Insurance Pcl Thai-Scandic Steel Co Ltd Source: Company, Bloomberg, Stock Exchange of Thailand. Note: * shareholding of Sirivadhanabhakdi Family in this company is not available. Plantheon Co Ltd** ** shareholdings of TCC Holding Co Ltd in these companies are not available. *** shareholdings of Thai Beverage in these companies are not 79.7% available. Oishi Group
33 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
AC The Siam Cement Public Co. Ltd. Samuel Lee, CFA The largest cement company in Thailand. Founded in 1913 by King Rama VI. (852) 2800-8536 [email protected]. Morgan.com Currently owned by Crown Property Bureau. J.P. Morgan Securities (Asia Pacific) Limited
Bureau of the Chase Tun Siam Thai NVDR State Street Office of the Siam Cement Crown Nominees Laddawan Commercial Free Float Co., Ltd. Bank & Trust Privy Purse Foundation Property Ltd 42 Co Ltd Bank 30% 10.8% 3.7% 3.4% 1.6% 1.3% 1.1% 0.8% 47.3%
The Siam Cement Public Co. Ltd.
SIAM CEMENT 100% 100% SCG CORPORATION 100% SCG Chemicals Company 100% INDUSTRIAL LAND SCG Plastics Co., Ltd. S.A. Limited CO.,LTD.
THE CONCRETE Thai Plastic and 42.9% 100% 100% SIAM ANTIMONY 45.6% 100% Thai Polypropylene Co., PRODUCTS AND Chemicals Public SERVICE CO.,LTD. Ltd. AGGREGATE CO.,LTD. Company Limited
100% THE SIAM PIPE 98% SIAM TYRE PUBLIC 100% SCG Building Materials 43.4% Rayong Olefins Co., Ltd. PRODUCTS CO.,LTD. CO.,LTD. Co., Ltd.
100% 71.4% 100% TIP FIBRE-CEMENT Siam Sanitary Ware Thai Polyethylene Co., QUALITY 51% CO.,LTD. Company Limited Ltd. CONSTRUCTION PRODUCTS PUBLIC COMPANY LIMITED 100% AGGREGATE SUPPLY 100% THAI UNION PAPER 86% UNITED PULP AND CO.,LTD. INDUSTRY CO.,LTD. PAPER CO., INC.
100% 98% SCG Paper Public 86.5% Thai Cane Paper Public THAI CERAMIC CO.,LTD. Company Limited Company Limited
THE CPAC READY PHOENIX PULP AND 100% 100% Cementhai Holding Co., 77.8% MIXED CONCRETE PAPER COMPANY Ltd. CO.,LTD. LIMITED
Source: Company, Bloomberg, Stock Exchange of Thailand.
34 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Appendix Table 12: Thailand’s macro economic indicators 2009 2010 2011 2012 p 2013 p 2014 p 1. Population (Million persons) 63.53 63.88 64.08 64.46 64.79 .... 2. GDP (New series 1990-2010 edition) 2/ 2.1 GDP : Chain volume measures (billion baht) 7,634 8,200 8,251 8,833 ...... (% change) -0.9 7.4 0.6 7.1 ...... 2.1.1 Agriculture (Billions of Baht) 604 601 638 651 ...... (% change) -0.2 -0.4 6.2 1.9 ...... 2.1.2 Non-agriculture (Billions of Baht) 7,038 7,620 7,616 8,205 ...... (% change) -0.9 8.3 0.0 7.7 ...... 2.2 GDP at current price (Billions of Baht) 9,599 10,734 11,189 12,221 ...... (% change) -0.7 11.8 4.2 9.2 ...... 2.3 GNP per capita (Baht : Person) 138,530 152,394 159,685 172,491 ...... 3. Inflation 3.1 Headline (% change) -0.90 3.30 3.81 3.02 2.18 2.00 3.2 Core (% change) 3/ 0.30 1.00 2.36 2.09 1.00 1.19 4. External Account 4.1 Export (BOP basis) (Billions of USD) 150.8 191.6 219.1 225.9 225.4 55.6 (% change) -13.9 27.1 14.3 3.1 -0.2 -0.8 4.2 Import (BOP basis) (Billions of USD) 118.2 161.9 202.1 219.9 219.0 49.1 (% change) -25.1 37.0 24.9 8.8 -0.4 -14.8 4.3 Trade balance (Billions of USD) 32.6 29.8 17.0 6.0 6.4 6.5 4.4 Current account balance (Billions of USD) 21.9 10.0 8.9 -1.5 -2.8 8.2 (as % of GDP) 8.3 3.8 1.2 -0.4 -0.7 .... 4.5 Net capital movement (Billions of USD) -2.6 24.8 -7.5 13.7 0.4 -4.1 4.5.1 Central Bank 1.5 2.7 -0.1 1.0 -4.6 0.1 4.5.2 Government 0.60 3.60 3.40 6.50 4.40 -0.80 4.5.3 Other Depository Corporation 4/ 8.30 10.30 -8.90 16.40 -1.00 -6.60 4.5.4 Other Sectors -13.00 8.20 -1.80 -10.20 1.50 3.10 4.6 Balance of payments (Billions of USD) 24.1 31.3 1.2 5.3 -5.0 -0.5 4.7 International reserves (Billions of USD) 138.4 172.1 175.1 181.6 167.2 167.4 4.8 Swap Obligation (Billions of USD) -15.7 -19.6 -31.2 -24.1 -23.0 -23.6 4.9 Total debt outstanding (Billions of USD) 75.3 100.6 104.6 133.2 139.9 139.9 of which : Public debt 5/ 15.4 26.3 28.0 38.0 37.9 37.7 4.10 Total debt service ratio (%) 7.5 4.7 3.4 4.2 4.0 .... of which : Public (included BOT since 1997) 0.7 0.6 0.6 0.6 0.9 .... 5. Government Finance (fiscal year) 5.1 Overall cash balances (Billions of Baht) -417.1 -200.4 -159.9 -287.9 -209.1 -540.1 (as % of GDP) -4.7 -2.0 -1.5 -2.6 -1.8 .... 5.2 Total public debt outstanding (Billions of Baht) 6/ 4,001.9 4,230.7 4,448.3 4,937.2 5,430.6 5,530.4 Domestic debt 3,617.6 3,868.2 4,097.2 4,596.6 5,052.5 5,154.1 6. Monetary Statistics 7/ 6.1 Narrow Money (Billions of Baht) 1,174.6 1,302.4 1,414.3 1,598.3 1,661.3 1,637.7 (% change) 12.8 10.9 8.6 13.0 3.9 3.9 6.2 Broad Money (Billions of Baht) 10,617.0 11,778.8 13,559.9 14,966.8 16,062.2 16,192.6 (% change) 6.8 10.9 15.1 10.4 7.3 6.4 6.3 Domestic Claims : Included investment (% change) 4.7 10.0 16.0 15.2 7.9 7.6 6.4 Other Depository Corporations deposits (% change) 8/ 5.5 8.7 10.1 23.0 9.2 8.5 6.5 Interest rate (year end) 9/ 6.5.1 Prime rate : Min 5.85 6.12 7.25 7.00 6.75 6.75 Prime rate : Max 6.25 6.50 7.63 7.38 7.25 7.13 6.5.2 Fixed deposits (1 yr.) : Min 0.65 1.40 2.70 2.35 2.15 1.70 Fixed deposits (1 yr.) : Max 1.00 1.70 3.00 2.50 2.35 1.95 7. Exchange rate (average inter-bank exchange rate) Baht :1 US$ (Reference rate) average 34.34 31.73 30.49 31.08 30.73 32.66 Remark: 1/ Figures in the last year column are “year-to-date” value; % change represents percentage change from the same period of the previous year. 2/ The NESDB has improved the compilation technique of the National Income in real terms and incorporated new economic activities, revising the benchmark in accordance with the most recent surveys and censuses starting from the series of 1990-2010 and onwards. 3/ Exclude raw food and energy items from the consumer price index basket. 4/ Include Commercial bank and BIBF's. 5/ Include Bank of Thailand's debt. 6/ Exclude Bank of Thailand and Financial Institutions Development Fund's Debt. 7/ From 2003, the compilation method follows MFSM 2000. 8/ Excluding inter Other Depository Corporations. 9/ As quoted by the 5 largest banks. Source: Bank of Thailand.
35 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Table 13: Stock Exchange of Thailand and MSCI Thailand constituents (%) Ticker Name Sector MCap (US$mn) SET Index (Wt %) MSCI Thailand (Wt %) PTT TB PTT Pcl Energy 25514 6.67 9.37 ADVANC TB Advanced Info Telecom 20937 5.47 8.80 PTTEP TB PTT Expl & Prod Energy 18517 4.84 7.72 SCB TB Siam Comm Bk Pcl Financials 16607 4.34 10.34 SCC TB Siam Cement Pcl Materials 15219 3.98 6.28 KBANK TB Kasikornbank Pcl Financials 13753 3.60 12.86 CPALL TB CP ALL Pcl CS 12529 3.28 6.86 BBL TB Bangkok Bank Pub Financials 10795 2.82 7.10 PTTGC TB Ptt Global Chem Materials 9244 2.42 4.14 DTAC TB Total Access Com Telecom 8734 2.28 AOT TB Airports Of Thai Industrials 7992 2.09 2.89 KTB TB Krung Thai Bank Financials 7925 2.07 2.30 BGH TB Bangkok Dusit Md Health Care 7745 2.03 1.69 INTUCH TB Intouch Holdings Telecom 7258 1.90 BAY TB Bank Ayudhya Pcl Financials 7083 1.85 CPF TB Charoen Pok Food CS 6609 1.73 2.69 CPN TB Central Pattana Financials 6225 1.63 2.12 MAKRO TB Siam Makro Pub CS 5341 1.40 BIGC TB Big C Supercente CS 4754 1.24 IVL TB Indorama Venture Materials 3743 0.98 1.29 GLOW TB Glow Energy Pcl Utilities 3534 0.92 1.42 TOP TB Thai Oil Pcl Energy 3110 0.81 1.50 TRUE TB True Corp Pcl Telecom 3079 0.80 1.23 HMPRO TB Home Product Cen CD 3057 0.80 1.03 MINT TB Minor Internatio CD 3038 0.79 1.37 BEC TB Bec World Pcl CD 3018 0.79 1.82 BTS TB Bts Group Holdin Industrials 3015 0.79 1.69 TMB TB Tmb Bank Pcl Financials 3009 0.79 1.05 LH TB Land & Houses Pc Financials 2965 0.78 BLA TB Bangkok Life Ass Financials 2957 0.77 SCCC TB Siam City Cement Materials 2931 0.77 BH TB Bumrungrad Hospi Health Care 2499 0.65 TUF TB Thai Union Froze CS 2388 0.62 RATCH TB Ratchaburi Elec Utilities 2343 0.61 BANPU TB Banpu Pub Co Ltd Energy 2283 0.60 1.15 BJC TB Berli Jucker Pcl Industrials 2218 0.58 DELTA TB Delta Elec Thai IT 2215 0.58 SCBLIF TB Scb Life Assuran Financials 2214 0.58 IRPC TB IRPC Pcl Energy 2193 0.57 1.29 EGCO TB Elec Generating Utilities 2111 0.55 ROBINS TB Robinson Dept St CD 1947 0.51 BTSGIF TB Bts Infras Fund - 1738 0.45 TRUEIF TB True Infras Fund - 1735 0.45 JAS TB Jasmine Intl Pcl Telecom 1730 0.45 PS TB Pruksa Real Esta Financials 1681 0.44 M TB Mk Restaurants CD 1595 0.42 TCAP TB Thanachart Capit Financials 1295 0.34 GLOBAL TB Siam Global Hous CD 1283 0.34 THCOM TB Thaicom Pcl Telecom 1278 0.33 TTW TB TTW Pcl Utilities 1277 0.33 CENTEL TB Central Plaza Ht CD 1276 0.33 BCP TB Bangchak Petrole Energy 1249 0.33 VGI TB Vgi Global Media CD 1245 0.33 CIMBT TB Cimb Thai Bank P Financials 1234 0.32 KTIS TB Kaset Thai Inter CS 1159 0.30 CK TB Ch Karnchang Pcl Industrials 1136 0.29 KKP TB Kiatnakin Bank Financials 1101 0.29 BKI TB Bangkok Insuranc Financials 1097 0.29 CPNRF TB Cpn Retail Lease Financials 1059 0.28 STEC TB Sino Thai Engr Industrials 1046 0.27 SPALI TB Supalai Pub Co Financials 1041 0.27 HEMRAJ TB Hemaraj Land Dev Financials 1036 0.27 BLAND TB Bangkok Land Pcl Financials 1007 0.26 THAI TB Thai Airways Int Industrials 958 0.25 ICHI TB Ichitan Group Pc CS 955 0.25 TISCO TB Tisco Financial Financials 952 0.25 STPI TB Stp&I Pub Co Ltd Materials 941 0.25 TF TB Thai President CS 925 0.24 QH TB Quality Houses Financials 924 0.24 TLGF TB Tesco Lotus Reta Financials 912 0.24 TCIF TB Thai Commercial - 911 0.24 HANA TB Hana Microelectr IT 877 0.23 36 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Ticker Name Sector MCap (US$mn) SET Index (Wt %) MSCI Thailand (Wt %) MBK TB Mbk Pcl Financials 857 0.22 TPC TB Thai Plastic Chm Materials 820 0.21 BECL TB Bangkok Express Industrials 816 0.21 TTA TB Thoresen Thai Ag Industrials 815 0.21 SVH TB Samitivej Pub Co Health Care 808 0.21 PSL TB Precious Shippin Industrials 792 0.21 TPIPL TB Tpi Polene Pcl Materials 788 0.21 WHA TB Wha Corp Pcl Financials 823 0.20 LPN TB Lpn Development Financials 720 0.19 RAM TB Ramkhamhaeng Hos Health Care 717 0.19 AEONTS TB Aeon Thana Sinsa Financials 707 0.18 KSL TB Khon Kaen Sugar CS 693 0.18 DCC TB Dynasty Ceramic Industrials 690 0.18 TTCL TB Toyo-Thai Corp Industrials 674 0.18 ITD TB Italian-Thai Dvl Industrials 664 0.17 TRIF TB Thai Ret Inv Fnd Financials 654 0.17 PB TB President Bakery CS 648 0.17 SSC TB Sermsuk Pcl CS 642 0.17 KCE TB Kce Electronics IT 640 0.17 BMCL TB Bangkok Metro Pc Industrials 637 0.17 ESSO TB Esso Thailand Energy 633 0.17 LHBANK TB Lh Financial Financials 622 0.16 SPCG TB Spcg Pcl Utilities 622 0.16 SAMART TB Samart Corp Pcl IT 601 0.16 BCH TB Bangkok Chain Ho Health Care 582 0.15 MEGA TB Mega Lifescience Health Care 575 0.15 AAV TB Asia Aviation Industrials 574 0.15 VIBHA TB Vibhavadi Med Health Care 564 0.15 TVO TB Thai Vegetable CS 552 0.14 STA TB Sri Trang Agro CD 546 0.14 MCOT TB Mcot Pcl CD 545 0.14 EASTW TB Eastern Water Re Utilities 543 0.14 BAFS TB Bangkok Aviation Industrials 540 0.14 SIRI TB Sansiri Pub Co Financials 535 0.14 OISHI TB Oishi Group Pcl CD 529 0.14 TCCC TB Thai Central Chm Materials 526 0.14 GLAND TB Grand Canal Land Financials 519 0.14 STANLY TB Thai Stanley Ele CD 509 0.13 AMATA TB Amata Corp Pub Financials 507 0.13 OFM TB Officemate Pcl CD 505 0.13 GFPT TB Gfpt Pcl CS 505 0.13 EARTH TB Energy Earth Pcl Energy 492 0.13 UV TB Univentures Pcl Financials 484 0.13 SPF TB Samui Airport Financials 478 0.12 AP TB Ap Thailand Pcl Financials 471 0.12 SGP TB Siamgas & Petro Energy 468 0.12 MAJOR TB Major Cineplex CD 463 0.12 PCSGH TB Pcs Machine Grou CD 447 0.12 MC TB Mc Group Pcl CD 446 0.12 SIM TB Samart I-Mobile IT 445 0.12 GOLD TB Golden Land Prop Financials 444 0.12 SAWAD TB Srisawad Power - 442 0.12 SNP TB S&P Syndicate CD 426 0.11 CHG TB Chularat Hospita Health Care 426 0.11 TICON TB Ticon Industrial Financials 505 0.11 CKP TB Ck Power Pcl Utilities 412 0.11 SUPER TB Superblock Pcl Materials 405 0.11 SPC TB Saha Pathanapibu CD 399 0.10 BJCHI TB Bjc Heavy Indust Industrials 388 0.10 VNT TB Vinythai Pub Co Materials 387 0.10 TFUND TB Ticon Property F Financials 378 0.10 SC TB Sc Asset Corp Pc Financials 365 0.10 MBKET TB Maybank Kim Eng Financials 362 0.09 ICC TB Icc Intl Pcl CD 350 0.09 THRE TB Thai Reinsurance Financials 349 0.09 SPI TB Saha Pathana Int Financials 348 0.09 SUC TB Saha-Union Corp CD 348 0.09 SSI TB Sahavirya Steel Materials 343 0.09 NYT TB Namyong Terminal Industrials 342 0.09 CCET TB Cal-Comp Electro IT 342 0.09 OHTL TB Ohtl Pcl CD 341 0.09
37 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Ticker Name Sector MCap (US$mn) SET Index (Wt %) MSCI Thailand (Wt %) GUNKUL TB Gunkul Engineer Industrials 341 0.09 KTC TB Krungthai Card P Financials 336 0.09 TIP TB Dhipaya Insuranc Financials 334 0.09 NOK TB Nok Air Pcl Industrials 330 0.09 SRICHA TB Sriracha Constr Industrials 324 0.08 DSGT TB Dsg Int Thai Pcl CS 323 0.08 INOX TB Posco-Thainox Materials 309 0.08 ROJNA TB Rojana Indus Par Financials 299 0.08 UVAN TB Univanich Palm O CS 298 0.08 ERW TB The Erawan Group CD 296 0.08 SMK TB Syn Mun Kong Ins Financials 295 0.08 GRAMMY TB Gmm Grammy Pcl CD 293 0.08 SVI TB Svi Pcl IT 293 0.08 SAUCE TB Thaitheparos Plc CS 288 0.08 CPTGF TB Cp Tower Growth - 282 0.07 SAMTEL TB Samart Telcoms Telecom 281 0.07 WHAPF TB Wha Premium Fact Financials 276 0.07 NPARK TB Natural Park Pcl Financials 275 0.07 AYUD TB Sri Ayudhya Cap Financials 267 0.07 FUTUREPF TB Future Park Leas Financials 266 0.07 RS TB Rs Pcl CD 260 0.07 TASCO TB Tipco Asphalt Materials 254 0.07 SABINA TB Sabina Pcl CD 251 0.07 LOXLEY TB Loxley Pcl IT 251 0.07 THREL TB Thaire Life Assu Financials 251 0.07 THANI TB Ratchthani Leasi Financials 242 0.06 SF TB Siam Future Dev Financials 239 0.06 ALUCON TB Alucon Pub Co Materials 236 0.06 PTL TB Polyplex Pcl/Tha Materials 234 0.06 TCB TB Thai Carbon Blac Materials 233 0.06 JMART TB Jaymart Pcl IT 229 0.06 MTI TB Muang Thai Insur Financials 228 0.06 SAT TB Somboon Advance CD 222 0.06 ANAN TB Ananda Dev Pcl Financials 222 0.06 CMR TB Chiang Mai Ram M Health Care 221 0.06 UMI TB Union Mosaic Ind Industrials 219 0.06 ASP TB Asia Plus Securi Financials 218 0.06 LANNA TB Lanna Resources Energy 218 0.06 QHPF TB Qual Hse Lse Pro Financials 217 0.06 TSTH TB Tata Steel Thai Materials 216 0.06 MODERN TB Modernform Group CD 215 0.06 TFD TB Thai Factory Dev Financials 211 0.06 PR TB President Rice CS 210 0.05 SITHAI TB Srithai Superwar Materials 207 0.05 TR TB Thai Rayon Pub Materials 206 0.05 PRG TB Patum Rice Mill CS 205 0.05 ASK TB Asia Sermkij Lea Financials 203 0.05 UNIQ TB Unique Engineer Industrials 201 0.05 WORK TB Workpoint Entert CD 200 0.05 SHANG TB Shangri-La Hotel CD 198 0.05 DRT TB Diamond Building Materials 198 0.05 BEAUTY TB Beauty Community CD 195 0.05 SPG TB Siam Pan Grp Pcl Industrials 194 0.05 AIT TB Advanced Informa IT 190 0.05 DEMCO TB Demco Pcl Industrials 188 0.05 AI TB Asian Insulators Energy 187 0.05 SCSMG TB Siam Commercial Financials 187 0.05 CNT TB Christiani & Nie Industrials 185 0.05 VNG TB Vanachai Group Industrials 185 0.05 CSL TB Cs Loxinfo Pcl IT 183 0.05 WACOAL TB Thai Wacoal Pcl CD 183 0.05 RML TB Raimon Land Pcl Financials 182 0.05 KBS TB Khonburi Sugar CS 181 0.05 SKR TB Sikarin Pub Co Health Care 178 0.05 GL TB Group Lease Publ Financials 177 0.05 PTG TB Ptg Energy Pcl CD 176 0.05 KGI TB Kgi Securities T Financials 175 0.05 ABPIF TB Amata B.Grimm - 175 0.05 PM TB Premier Market CS 174 0.05 KYE TB Kang Yong Elec CD 172 0.05 MALEE TB Malee Sampran CS 172 0.04 PF TB Prop Perfect Pcl Financials 169 0.04 SINGER TB Singer Thai Pcl CD 169 0.04 38 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Ticker Name Sector MCap (US$mn) SET Index (Wt %) MSCI Thailand (Wt %) TK TB Thitikorn Pcl Financials 168 0.04 TGROWTH TB Ticon Indus Leas Financials 167 0.04 RCL TB Regional Contain Industrials 165 0.04 CNS TB Cap Nomura Secs Financials 163 0.04 SNC TB Snc Former Pcl Industrials 162 0.04 A TB Areeya Property Financials 161 0.04 TGCI TB Thai-German Cera Industrials 160 0.04 SYMC TB Symphony Communi Telecom 159 0.04 AH TB Aapico Hitech CD 155 0.04 NOBLE TB Noble Develop Financials 153 0.04 LRH TB Laguna Resorts CD 152 0.04 FORTH TB Forth Corp Pcl IT 152 0.04 SFP TB Siam Food Prod CS 152 0.04 TLOGIS TB Tpark-Logis Prop Financials 151 0.04 NTV TB Nonthavej Hospit Health Care 151 0.04 MDX TB Mdx Pcl Financials 151 0.04 DTC TB Dusit Thani Pcl CD 150 0.04 SCG TB Sahacogen Chonbu Utilities 144 0.04 JMT TB Jmt Network Serv Industrials 143 0.04 TMT TB Thai Metal Trade Materials 138 0.04 NWR TB Nawarat Patanaka Industrials 137 0.04 GRAND TB Grande Asset Hot CD 135 0.04 HPF TB Hemraj Industria Financials 135 0.04 CPNCG TB Cpn-Co Gr Le Pro Financials 133 0.03 NMG TB Nation Multimedi CD 132 0.03 CFRESH TB Seafresh Ind Pcl CS 132 0.03 POPF TB Prime Office Lea Financials 129 0.03 AQUA TB Aqua Corporation CD 129 0.03 SST TB Sub Sri Thai Pcl CS 129 0.03 METCO TB Muramoto Elec IT 129 0.03 MFC TB Mfc Asset Mgt Pu Financials 125 0.03 LTX TB Luckytex (Thai) CD 124 0.03 MJLF TB Ing-Maj Cine Lea Financials 120 0.03 PACE TB Pace Development Financials 120 0.03 CRYSTAL TB Crystal R G Leas - 118 0.03 QCON TB Quality Construc Materials 117 0.03 ESTAR TB Eastern Star Rea Financials 116 0.03 AJ TB Aj Plast Pcl Materials 116 0.03 AHC TB Aikchol Hospital Health Care 115 0.03 CTW TB Charoong Thai Wc Industrials 115 0.03 TIPCO TB Tipco Foods Pcl CS 113 0.03 TSC TB Thai Steel Cable CD 113 0.03 IEC TB Intl Engineering IT 113 0.03 POST TB Post Publish Pcl CD 113 0.03 DTCPF TB Dusit Thani Free Financials 111 0.03 NNCL TB Navanakorn Pcl Financials 107 0.03 TTLPF TB Talaad Thai Financials 106 0.03 MILL TB Millcon Steel Pc Materials 110 0.03 MFEC TB Mfec Pub Co Ltd IT 105 0.03 KAMART TB Karmarts Pcl CD 105 0.03 CGS TB Country Group Se Financials 103 0.03 SUSCO TB Susco Pub Co Ltd Energy 101 0.03 LALIN TB Lalin Property Financials 101 0.03 PDI TB Padaeng Indus Materials 99 0.03 PRINC TB Principal Capita Financials 99 0.03 LST TB Lam Soon Thai CS 96 0.03 UPOIC TB United Palm Oil CS 96 0.03 MIPF TB One-Mlnaire Prop - 96 0.03 TNL TB Thanulux Pub Co CD 96 0.03 EVER TB Everland Pcl Financials 95 0.02 BWG TB Better World Gre Industrials 95 0.02 GYT TB Goodyear Thailan CD 94 0.02 AMARIN TB Amarin Printing CD 94 0.02 MK TB Mk Real Estate Financials 94 0.02 SSSC TB Siam Steel Serv Materials 94 0.02 PAP TB Pacific Pipe Pcl Materials 93 0.02 TWFP TB Thai Wah Food CS 93 0.02 MCHAI TB Mahachai Hospit Health Care 93 0.02 MACO TB Master Ad Pcl CD 93 0.02 LHPF TB Land House Fund Financials 93 0.02 IHL TB Interhides Pcl CD 92 0.02
39 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Ticker Name Sector MCap (US$mn) SET Index (Wt %) MSCI Thailand (Wt %) QHHR TB Qlty-Hse Htl Res - 92 0.02 SMT TB Stars Microelect IT 91 0.02 IFEC TB Inter Fareast En Industrials 89 0.02 KCAR TB Krungthai Car Re Industrials 89 0.02 IRC TB Inoue Rubber Pcl CD 89 0.02 EE TB Eternal Energy P Energy 88 0.02 PRANDA TB Pranda Jewelry CD 87 0.02 ROH TB Royal Orchid Htl CD 85 0.02 CCP TB Chonburi Concret Materials 85 0.02 TKS TB Tks Technologies Industrials 84 0.02 HFT TB Hwa Fong Rubber CD 84 0.02 TRU TB Thairung Union CD 100 0.02 SSF TB Surapon Foods CS 83 0.02 TRC TB Trc Construction Industrials 83 0.02 SOLAR TB Solartron Pcl Industrials 83 0.02 CSC TB Crown Seal Pcl Materials 82 0.02 SCP TB Southern Concret Materials 82 0.02 SYNTEC TB Syntec Construct Industrials 82 0.02 ASIA TB Asia Hotel Pcl CD 81 0.02 SNJ TB S&J Intl Ent Pcl CS 80 0.02 DCON TB Dcon Products Pc Materials 80 0.02 M-AAA TB Mfc Amazing A-La - 80 0.02 TGPRO TB Thai-German Pro Materials 95 0.02 TMD TB Thai Metal Drum Materials 79 0.02 LEE TB Lee Feed Mill CS 79 0.02 TWS TB Thai Wah Starch CS 77 0.02 UTP TB United Paper Pcl Materials 76 0.02 EPCO TB Eastern Printing Industrials 76 0.02 HTC TB Haad Thip Pcl CS 76 0.02 TOG TB Thai Optical Gro Health Care 76 0.02 MCS TB M.C.S. Steel Pcl Materials 75 0.02 VIH TB Srivichai Vejviv Health Care 75 0.02 SMIT TB Sahamit Machiner Industrials 74 0.02 GEL TB Gen Engineering Materials 73 0.02 TFI TB Thai Film Indust Materials 73 0.02 KKC TB Kulthorn Kirby Industrials 73 0.02 SMPC TB Sahamitr Pressur Materials 70 0.02 WG TB White Group Pcl Industrials 70 0.02 NUSA TB Nusasiri Pcl Financials 69 0.02 AQ TB Aq Estate Pcl Financials 67 0.02 RPC TB Rpcg Pcl Energy 67 0.02 SYNEX TB Synnex Thai Pcl IT 67 0.02 UOB8TF TB Uob Freehold Eig - 67 0.02 PREB TB Pre-Built Pcl Industrials 65 0.02 TBSP TB Thai Brit Secur Industrials 65 0.02 MJD TB Major Developmen Financials 62 0.02 CSS TB Comm & System So Industrials 61 0.02 PLE TB Power Line Engin Industrials 61 0.02 SPWPF TB Sri Panwa Hotel - 59 0.02 PL TB Phatra Leasing Financials 58 0.02 SUTHA TB Golden Lim Pcl Materials 58 0.02 SORKON TB S Khonkaen Foods CS 58 0.02 AS TB Asiasoft Corp IT 58 0.02 TYCN TB Tycoons Worldwid Materials 57 0.01 MPIC TB M Pictures Enter CD 57 0.01 UOBKH TB Uob Kay Hian Sec Financials 56 0.01 NKI TB Navakij Insuranc Financials 58 0.01 SENA TB Sena Development Financials 55 0.01 TTL TB Ttl Industries CD 55 0.01 PATO TB Pato Chemical Materials 55 0.01 ZMICO TB Seamico Securiti Financials 55 0.01 WAVE TB Wave Entertainme CD 55 0.01 RASA TB Rasa Property Financials 54 0.01 LIVE TB Live Inc Pcl CD 54 0.01 MII TB Mfc Industri-Uts - 53 0.01 CHOTI TB Kiang Huat Seagu CS 53 0.01 PRIN TB Prinsiri Pcl Financials 52 0.01 THE TB Steel Pcl/ The Industrials 52 0.01 ERWPF TB Erawan Hotel Gpf - 52 0.01 SIRIP TB Siri Prime Offic - 52 0.01 AJD TB Crown Tech Advan CD 52 0.01 KPNPF TB Kpn Tower Prop F - 52 0.01 MIDA TB Mida Assets Pcl Financials 52 0.01 40 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Ticker Name Sector MCap (US$mn) SET Index (Wt %) MSCI Thailand (Wt %) SEED TB Se-Education Pcl CD 52 0.01 FSS TB Finansia Syrus S Financials 51 0.01 KDH TB Thonburi Medical Health Care 50 0.01 PPP TB Premier Products Industrials 49 0.01 CM TB Chiangmai Froz F CS 49 0.01 MATCH TB Matching Maximiz CD 49 0.01 CTARAF TB Cent Hotel & Res Financials 48 0.01 MSC TB Metro Systems IT 48 0.01 SAM TB Samchai Steel In Materials 47 0.01 AKR TB Ekarat Engineer Industrials 46 0.01 SAMCO TB Sammakorn Pub Co Financials 46 0.01 PAE TB Pae Thai Pub Co Industrials 46 0.01 NEP TB Nep Realty & Ind Materials 45 0.01 SEAFCO TB Seafco Pcl Industrials 45 0.01 NCH TB N.C. Housing Pcl Financials 45 0.01 TWP TB Thai Wire Prod Industrials 45 0.01 SIS TB Sis Distribution IT 45 0.01 MLINK TB M Link Asia Corp IT 45 0.01 TSTE TB Thai Sugar Terml Industrials 43 0.01 CPI TB Chumporn Palm CS 43 0.01 TRUBB TB Thai Rubber Latx Materials 43 0.01 TCC TB Thai Capital Cor Industrials 43 0.01 CSP TB Csp Steel Center Materials 43 0.01 FE TB Far East Ddb Pcl CD 42 0.01 BAT3K TB Thai Storage Bat CD 41 0.01 BROCK TB Baan Rock Garden Financials 41 0.01 TNPF TB Trinity Freehold - 40 0.01 AEC TB Aec Securities P Financials 40 0.01 BSBM TB Bangsaphan Barmi Materials 40 0.01 CI TB Charn Issara Dev Financials 40 0.01 MATI TB Matichon Pub Co CD 39 0.01 LHK TB Lohakit Metal Pc Industrials 39 0.01 RCI TB Royal Ceramic Industrials 39 0.01 KWC TB Krungdhep Sophon Industrials 39 0.01 SIAM TB Siam Steel Intl Industrials 38 0.01 TVI TB Thai Vivat Ins Financials 37 0.01 TPCORP TB Textile Prestige CD 37 0.01 TH TB Tong Hua Comm CD 36 0.01 CSR TB City Sports&Rec CD 36 0.01 IFS TB Ifs Capital Thai Financials 35 0.01 TLUXE TB Thai Luxe Enterp CS 35 0.01 EIC TB Electronics Indu IT 35 0.01 JCT TB Jack Chia Indus CS 35 0.01 AMC TB Asia Metal Pcl Materials 34 0.01 ASIAN TB Asian Seafoods CS 34 0.01 TC TB Tropical Canning CS 34 0.01 TPOLY TB Thai Polycons Industrials 34 0.01 TNITY TB Trinity Watthana Financials 34 0.01 TTI TB Thai Textile Pub CD 34 0.01 MAX TB Max Metal Corp P Industrials 33 0.01 PG TB Peoples Garment CD 32 0.01 PT TB Premier Technolo IT 32 0.01 OCC TB Occ Pub Co Ltd CD 31 0.01 JTS TB Jasmine Telecom IT 31 0.01 LUXF TB Lux Real Est Inv Financials 31 0.01 GOLDPF TB Gold Prop Fund - 31 0.01 UP TB Union Plastic Materials 31 0.01 BFIT TB Bangkok First In Financials 31 0.01 TCJ TB Tcj Asia Pcl Industrials 31 0.01 BKKCP TB Bkk Comm Prop Financials 31 0.01 MNRF TB Multi-N Residenc Financials 30 0.01 QHOP TB Qlty Hospitality - 30 0.01 SPORT TB Siam Sport Syndi CD 30 0.01 FANCY TB Fancy Wood Indus CD 30 0.01 IT TB It City Pcl CD 29 0.01 TEAM TB Team Precision IT 29 0.01 CITY TB City Steel Pcl Materials 29 0.01 THIP TB Thantawan Indus Materials 29 0.01 EASON TB Eason Paint Pcl Materials 28 0.01 FMT TB Furukawa Metal Industrials 28 0.01 GBX TB Globlex Holding Financials 28 0.01
41 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Ticker Name Sector MCap (US$mn) SET Index (Wt %) MSCI Thailand (Wt %) ML TB Mida Leasing Pcl Financials 28 0.01 MNIT2 TB Nichada-Th Pro 2 - 28 0.01 INET TB Internet Thailan IT 27 0.01 TWZ TB Twz Corp Pcl IT 36 0.01 NSI TB Nam Seng Insuran Financials 27 0.01 PFCB TB Prakit Holdings CD 27 0.01 GC TB Global Connect Industrials 26 0.01 SVOA TB Svoa Public Co IT 35 0.01 VARO TB Varopakorn Pcl Materials 26 0.01 APURE TB Agripure Holding CS 26 0.01 SSPF TB Sala @ Sathorn Financials 25 0.01 GENCO TB Gen Environ Cons Industrials 25 0.01 RICH TB Rich Asia Steel Materials 25 0.01 TCMC TB Thai Carpet Mfg CD 25 0.01 TPA TB Thai Poly Acryli Materials 24 0.01 FNS TB Finansa Pcl Financials 24 0.01 SBPF TB Samui Buri Prope - 24 0.01 EMC TB Emc Pcl Industrials 48 0.01 WAT TB Wattana Capital Financials 24 0.01 TTTM TB Thai Toray Text CD 23 0.01 TNPC TB Thai Nam Plastic Materials 23 0.01 DRACO TB Draco Pcb Pcl IT 23 0.01 APCS TB Asia Precision Industrials 23 0.01 TOPP TB Thai Opp Pub Co Materials 22 0.01 CPL TB Cpl Group Pub Co CD 21 0.01 KC TB Kc Property Pcl Financials 21 0.01 M-STOR TB Mfc-Strat Storag - 21 0.01 OGC TB Ocean Glass Pcl CD 21 0.01 PE TB Premier Enterpri Financials 21 0.01 SPACK TB S Pack And Print Materials 20 0.01 TIW TB Thai Iron Works Materials 20 0.01 SSTPF TB Sub Sri Thai Pro - 20 0.01 AMANAH TB Amanah Leasing P Financials 20 0.01 TIF1 TB Ing-Thai Indu 1 - 19 0.01 TPP TB Thai Packaging & Materials 19 0.00 JCP TB Jc Leasehold Pro - - 0.00 MANRIN TB Mandarin Hotel CD 19 0.00 MONTRI TB 101-Montri Stora - 18 0.00 ECL TB Eastern Commerci Financials 18 0.00 BTC TB Bangpakong Termi Industrials 17 0.00 TIC TB Thai Insurance Financials 17 0.00 JUTHA TB Jutha Maritime Industrials 17 0.00 PAF TB Pan Asia Footwr CD 17 0.00 CWT TB Chai Watana Tann CD 17 0.00 SPPT TB Single Point Par IT 17 0.00 PERM TB Permsin Steel Materials 17 0.00 WIIK TB Wiik & Hoeglund Industrials 16 0.00 UT TB Union Textile CD 16 0.00 ROCK TB Rockworth Pub Co Industrials 16 0.00 NEW TB Wattana Karnpaet Health Care 16 0.00 NIPPON TB Nippon Pack Pcl Materials 16 0.00 UNIPF TB Uniloft Property Financials 15 0.00 MNIT TB Mfc-Nichada Than - 15 0.00 ACD TB Asia Corporate D CD 15 0.00 TKT TB T Krungthai Indu CD 14 0.00 FND TB Food & Drinks CS 14 0.00 ASIMAR TB Asian Marine Ser Industrials 14 0.00 INSURE TB Indara Insurance Financials 13 0.00 PRECHA TB Preecha Group Financials 13 0.00 UPF TB Union Pioneer Pc CD 13 0.00 SMM TB Siam Inter Multi CD 13 0.00 SAWANG TB Sawang Export CD 12 0.00 ABC-R TB Asset Brig-Nvdr CD 12 0.00 KTP TB Keppel Thai Prop Financials 11 0.00 WIN TB Wyncoast Industr Financials 11 0.00 TU-PF TB Tu Dome Res Cp - 11 0.00 AFC TB Asia Fiber Pcl CD 10 0.00 BUI TB Bangkok Union In Financials 10 0.00 TSI TB Thai Setakij Ins Financials 10 0.00 CHARAN TB Charan Insurance Financials 9 0.00 URBNPF TB Urbana Property Financials 8 0.00 NC TB Newcity Bangkok CD 8 0.00 CPH TB Castle Peak Hldg CD 7 0.00 42 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected] Ticker Name Sector MCap (US$mn) SET Index (Wt %) MSCI Thailand (Wt %) TCOAT TB Thai Coating Ind Materials 6 0.00 BTNC TB Boutique Newcity CD 6 0.00 DTCI TB Dtc Industries Industrials 5 0.00 Source: Stock Exchange of Thailand, MSCI, Datastream, J.P. Morgan
43 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Table 14: Political Timeline Date Event 24-Jun-32 The first Constitution promulgates 20-Jun-33 Coup by Phraya Paholpolpayuhasena 11-Oct-33 Attempted coup by Prince Bovorndeh 3-Aug-35 Attempted coup 29-Jan-38 Attempted coup 8-Nov-47 Military coup by Lt-Gen Pin Choonhavan. Kuang Apaiwong is appointed prime minister 6-Apr-48 Military coup. Gen Por Pibulsongkram is nominated prime minister 1-Oct-48 Attempted coup 26-Jun-49 Attempted coup by Pridi Panomyong 29-Jun-51 Attempted coup (Manhattan) 29-Nov-51 Coup by Gen Por Pibulsongkram (PM) 16-Sep-57 Military coup by Gen Sarit Thanarat, Gen Thanom Kittikajorn is nominated PM 20-Oct-58 Military coup 17-Nov-71 Coup led by Gen Thanom Kittikajorn (PM) 14-Oct-73 Coup by people 6-Oct-76 Military coup by Admiral Sa-ngad Saloryu, Thanin Kraivichian is appointed PM 20-Oct-77 Military coup by Admiral Sa-ngad Saloryu Dec-78 New constitution promulgates Apr-79 Democratic election, Gen Prem Tisulanonda assumes power 1-Apr-81 Attempted coup 18-Apr-83 General election. Gen Prem gives up his military position and heads a civilian government 9-Sep-85 Attempted coup 27-Jul-86 General election. Gen Prem is re-elected as prime minister 24-Jul-88 General election. Gen Chatichai Choonhaven is appointed prime minister 23-Feb-91 Military coup. A civilian, Anand Panyarachun, is installed as prime minister 22-Mar-92 New election with Samakee Tham Party, led by Narong Wongwan, wins the election but people do not accept Narong as PM and he is replaced by General Suchinda Kraprayoon. Later, there are demonstrations against General Suchinda forcing him to resign. Anand is re-instated temporarily. May-92 Bloodshed 12-Sep-92 General election sees Chuan Leekpai, leader of the Democrat Party, chosen as prime minister. 2-Jul-95 Government collapses, followed by general election. Banharn Silpaarcha of Chart Thai Party is elected prime minister 17-Nov-96 Banharn’s government resigns. Gen Chavalit Yongchaiyut of New Aspiration Party is elected prime minister. Oct-97 New Constitution Law, BE 2540 promulgates. Nov-97 Gen Chavalit resigns and Chuan Leekpai is appointed prime minister Mar-00 First senator election Nov-00 Chuan Leekpai dissolves the House of Representatives. 6-Jan-01 Election won by Thaksin Shinawatra of new Thai Rak Thai Party. Aug-01 Prime Minister Thaksin Shinawatra is cleared of assets concealment. 6-Feb-05 Thai Rak Thai Party in landslide win in General Elections. Thaksin Shinawatra is appointed prime minister 23-Jan-06 Thaksin family's tax-free $1.9 billion sale of their controlling stake in telecoms major Shin Corp to Singapore state investment firm Temasek angers Bangkok's middle class, fuelling weeks of protests. 24-Feb-06 Prime Minister Thaksin Shinawatra dissolves the House of Representatives 2-Apr-06 Snap election and Thai Rak Thai Party wins. 5-Apr-06 Thaksin steps down and hands day-to-day power to a deputy three days after an opposition boycott renders a snap general election 8-May-06 The Constitution Court annuls the Apr-2 election 19-Sep-06 Military coup led by Gen Sonthi Boonyaratklin and Gen Surayud Chulanont is appointed prime minister. Tanks surround Government House in a bloodless military coup, Thailand’s first in 15 years. Thaksin ousted while he is preparing to address the U.N. General Assembly in New York. The takeover follows months of protests led by the People’s Alliance for Democracy, known as the “Yellow Shirts”, who accuses Thaksin of corruption and abuse of power 1-Oct-06 Former army commander-in-chief Surayud Chulanont swears in as interim prime minister. Thaksin, exiled in London, steps down as Thai Rak Thai party leader two days later 31-Dec-06 A string of bombs in Bangkok kills three people and wounds more than 30 as crowds celebrate New Year’s Eve 26-Mar-07 Prosecutors charge Potjaman Shinawatra, Thaksin’s wife, and her brother and secretary with tax evasion 30-May-07 The Constitution Tribunal finds the Thai Rak Thai Party guilty and dissolves the party as well as bans 110 executives from the electoral process for five years while acquitting the Democrat Party of electoral fraud 19-Aug-07 The national referendum on the draft charter (57% approval) 24-Aug-07 New Constitution Law, BE 2550 (2007) promulgates. 23-Dec-07 General election with People Power Party, a proxy for Thaksin’s disbanded Thai Rak Thai party, wins and later chooses veteran politician Samak Sundaravej as prime minister. 29-Jan-08 Samak Sundaravej forms a coalition government and becomes prime minister, after winning the majority of seats in the 2007 general elections 28-Feb-08 Former Prime Minister Thaksin Shinawatra returns to Thailand after his political allies won new elections and formed a coalition government. He and his wife face charges of corruption 28-Mar-08 The PAD regroups, threatening to resume protests against Thaksin. 11-Apr-08 The Election Commission votes to disband the Chart Thai and Matchima Thipataya parties – both coalition partners – for election fraud 25-May-08 The PAD begins demonstrations at Democracy Monument, demanding Samak's resignation, and later settles at Makkhawan Rangsan Bridge 27-Jun-08 Samak’s government survives a no-confidence motion in parliament. 11-Aug-08 Thaksin and his (then) wife, Potjaman Na Pombejra, skip bail and fly to the UK two weeks after she was sentenced to three years in prison for fraud 26-Aug-08 PAD protesters invade Government House, three ministries and headquarters of the NBT. Little effort is made to remove the protesters from Government House, although minor clashes between police and protesters are seen. 2-Sep-08 Anti-PAD protesters clash with the PAD, leaving 1 dead and 43 injured. A state of emergency is declared in Bangkok, which would last until 14 September 9-Sep-08 Samak is removed from office after the Constitutional Court ruled that his payment for an appearance on a TV cooking show constituted conflict of interest
44 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
Date Event 17-Sep-08 Somchai Wongsawat, Thaksin's brother-in-law, is ratified by the National Assembly and becomes prime minister. He is rejected by the PAD for being Thaksin's nominee. 29-Sep-08 Deputy Prime Minister Chavalit Yongchaiyudh begins negotiations with PAD leaders. 4-Oct-08 PAD leaders Chaiwat Sinsuwongse and Chamlong Srimuang are arrested by police on insurrection charges filed since shortly after invasion of Government House in August. 6-Oct-08 PAD protesters rally at parliament, attempting to block a parliament session in which Prime Minister Somchai is to seek approval of policies. Police attempts to disperse protesters using tear gas. Somchai is forced to cross a fence to exit, while members of parliament are stranded in the building for many hours. Intermittent clashes day-long left 2 dead and over 300 injured, including 20 policemen. Military troops are deployed to help control the situation. 9-Oct-08 An appeals court withdraws insurrection charges against PAD leaders and released Chamlong and Chaiwat on bail. The following day, the remaining PAD leaders turn themselves in to police and are released on bail 21-Oct-08 The Supreme Court finds Thaksin guilty in a land purchase conflict of interest case, and sentences him to two years in prison. 8-Nov-08 The Government of the UK, where Thaksin had been primarily residing, revokes the visas of Thaksin and his (then) wife, Potjaman Na Pombejra, while the couple is travelling in China 25-Nov-08 The PAD blockades Don Mueang, where the government holds its temporary offices, and Suvarnabhumi International Airports, leaving thousands of tourists stranded and cutting off most of Thailand's international air connections. Several explosions and clashes occur in the following days 2-Dec-08 After weeks of opposition-led protests, the Constitutional Court of Thailand dissolves the governing People's Power Party and two coalition member parties and bans leaders of the parties, including Prime Minister Somchai Wongsawat, from politics for five years. PM Somchai Wongsawat promptly resigns. Opposition Democrat Party leader Abhisit Vejjajiva is chosen prime minister 11-Apr-09 The UDD protest group storms the Fourth East Asia Summit in Pattaya, forcing its cancellation. Prime Minister Abhisit Vejjajiva declares a state of emergency in Bangkok and five neighbouring provinces Mar-10 Pro-Thaksin “Red Shirt” protesters pour into Bangkok in a bid to drive Abhisit from power, kicking off protests that shut down parts of the city and result in 18 deaths and over 800 injured. 13-May-10 Violence escalates as police and troops besiege protest camp. At least 35 people are killed and over 250 injured in clashes. "Red Shirt" leaders warn of the possibility of civil war. 19-May-10 Army overruns red shirt camp resulting in the death of 12 people. Red Shirt leaders surrender and are arrested which is followed by rioting across Bangkok in which many buildings are destroyed by arson attacks. May-11 The government announces July 3 election. Thaksin’s youngest sister, Yingluck Shinawatra, emerges as the main opposition candidate for premier Jul-11 The Thaksin-backed Pheu Thai party win election by a landslide. Aug-11 The Parliament elects Yingluck as Thailand’s first female prime minister Apr-12 Addressing supporters from neighboring Laos, Thaksin vows to return by the end of the year. Jun-12 The Parliament shelves debate on controversial legislation that opponents fear would open the door to Thaksin’s return. 13-Jul-12 The Constitutional Court dismisses opposition party petitions and rules that the proposed constitutional amendments did not threaten the revered monarchy. The Constitutional Court rules that the government would need the go-ahead from a referendum before an elected assembly could rewrite the constitution, but it leaves the way open for parts to be changed without that and the ruling party says it might take that route. (Reuters) Nov-12 Police fire tear gas and detain dozens of demonstrators as clashes erupted at the first major street protests against Yingluck’s government Dec-12 Authorities announce former Prime Minister Abhisit Vejjajiva and his deputy Suthep Thaugsuban are charged with murder for approving the May 2010 crackdown on Red Shirt protesters. Twenty-four Red Shirt leaders go on trial on terrorism charges linked to the 2010 protests Aug-13 The government introduces an amnesty bill covering political offenders since 2006 coup, but excluding leaders. Oct-13 Thousands of people join daily rallies in Bangkok against the controversial amnesty bill. Nov-13 The Lower House of Parliament overwhelmingly passes legislation but the Upper House rejects it. Opposition protesters occupy the finance and foreign ministries demanding Yingluck to resign. 26-Nov-13 Suthep Thaugsuban, who resigned from the Democrat Party to lead the protest group called “People’s Democratic Reform Committee (PDRC)”, demands that the government be dissolved and an unelected “people’s council” be established. It will implement reforms to eliminate all vestiges of Thaksin’s political power. 9-Dec-13 PM Yingluck dissolves the house of representatives and calls new elections on 2 Feb 21-Dec-13 The opposition Democrat Party announces that it will boycott the election 8-Jan-14 The National anti-Corruption Commission rules that 308 ex-MPs and senators acted illegally in passing a bill to make the Senate an all-elected body. The Constitution Court rules that the passing of the charter amendment of Article 190 which requires all treaties and contracts signed with other countries, which could have a serious socio-economic impact, to be approved by parliament, is unconstitutional 13-Jan-14 Tens of thousands of opposition protesters occupy major intersections in the capital in an attempt to “shut down” Bangkok, vowing to stay put until Yingluck quits. Demonstrators besiege polling stations for advance voting in parts of the country, preventing hundreds of thousands casting ballots. The government rejects calls for an election delay in response to several bouts of political violence in which at least 10 people have been killed and hundreds injured. 2-Feb-14 General election. A daylight gun battle shakes Bangkok as pro- and anti-government protesters clash on the eve of the election. Polls open without major problems in central and northern Thailand but opposition demonstrator’s block voting in dozens of constituencies in the south and Bangkok. 18-Feb-14 The National Anti-Corruption Commission says it found enough evidences against PM Yingluck Shinawatra to charge her with negligence over the government’s rice-pledging scheme. 2-Mar-14 The PDRC closes four protest sites and stops its Bangkok shutdown operation 11-Mar-14 The Election Commission disqualifies MR Sukhumbhand Paribatra as the winner of the Bangkok governor election a year ago, citing violations of the election law. 12-Mar-14 The Constitutional Court rules that the Bt2-trillion borrowing bill for infrastructure projects is unconstitutional. 21-Mar-14 The Constitutional Court annuls the February-2 general election. 30-Mar-14 Senate election 7-May-14 The Constitutional Court finds PM Yingluck Shinawatra and other nine cabinet members guilty and dismisses them for unconstitutional acts with regard to the transfer of former secretary-general of the National Security Council (NSC). 8-May-14 The National Anti-Corruption Commission has decided to seek the impeachment of Yingluck Shinawatra over the controversial rice pledging scheme 20-May-14 The military announces the imposition of martial law at 3am Bangkok Time 22-May-14 Thai military takes full control of the government. The coup is unexpected as the military imposed martial law just two days ago. Source: J.P. Morgan
45 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
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46 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
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47 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
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48 Anne Jirajariyavech, CFA Asia Pacific Equity Research (66-2) 684-2684 20 June 2014 [email protected]
J.P. Morgan Emerging Markets Equity Strategy Team Adrian Mowat David Aserkoff Chief Emerging Market Strategist and Head CEEMEA Equity Strategy of Asia Equity Strategy Phone: (44-20) 7134-5887 Phone: (852) 2800-8599 Email: [email protected]. Morgan.com Email: [email protected]. Morgan.com Bloomberg: JPMA ASERKOFF
J.P. Morgan Thailand Equity Research Team Anne Jirajariyavech, CFA Corrine Png Thailand Transport, Logistics & Aerospace Phone: (66-2) 684-2684 Phone: (65) 6882-1514 Email: [email protected]. Morgan.com Email: [email protected]. Morgan.com Bloomberg: JPMA JIRAJAwRIYAVECH
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