• What’s new

Thailand’s GDP expanded by 1.8% qoq sa, better than -1.1% qoq in 3Q21 and market expectation of +1.5%. It also grew 1.9% yoy vs -0.3% yoy in 4Q20 and market estimate +0.8%. For full-year 2021, the economy grew 1.6% compared to 6.2% contraction in 2020. It was a broad-based recover driven by easing Covid-19 restrictions, with improvement in private spending (+0.3% yoy vs -3.2% in 3Q21), private investment (-0.2% vs -0.4%), government spending (+8.1% vs +1.5%). Meanwhile, the recovering global economy has continued to support exports of goods and services (+17.7%) and drive inventory restocking. The NESDC is keeping 2022 growth projection at 3.5% - 4.5% This world be supported by (i) improving domestic demand, and (ii) a recovering tourism sector as international travel restrictions ease. However, the pandemic remains a key risk for the economy.

• Abalysis

Apart from pandemic restrictions, there is also risk of accelerating inflation pressuring consumer sentiment in the near-term. However, Thailand’s economic recovery will not be derailed. Country reopening and resumption of economic activities have improved the outlook for the industrial sector which will continue to benefit from inventory restocking and resilient global demand this year. The better economic conditions will push up the SET Index and earnings. Our end-2022 SET Index target is 1,780 - 1,800 based on historical 3-year average PER of 16.8x and 12M-Fwd EPS (2023F EPS: Bt108).