J.P.Morgan expressed their views on the Thai retail sector, which has seen a significant de-rating of approximately 20% year-to-date, driven by broader macroeconomic concerns and downward revisions in earnings within the discretionary segment.
On a stock-by-stock basis, performance has varied drastically, with price changes ranging from a 3% gain to a 57% decline year-to-date. This presents relative return opportunities in a market characterized by prevailing weaknesses.
Following the first quarter of 2025 results, there has been a strategic reshuffle of stock recommendations by the analyst to reflect earnings adjustments and recent discrepancies between stock prices and underlying fundamentals.
Key adjustments include upgrading Central Retail Corporation (CRC) to ‘Overweight’ from ‘Neutral’, while downgrading Siam Global House (GLOBAL) to ‘Neutral’ from ‘Overweight’, and Berli Jucker (BJC) to ‘Underweight’ from ‘Neutral’.
J.P.Morgan noted the recommendation for investors is to focus on quality stocks such as CP All (CPALL), Central Pattana (CPN), and Home Product Center (HMPRO), while selectively targeting opportunities in the discretionary sector, particularly with CRC.
Meanwhile, CP Axtra (CPAXT) and BJC are rated ‘Underweight’, as their current valuations do not justify the risks associated with the structural challenges facing large-format food retailers.
