CLSA’s latest analysis highlights emerging investment opportunities in the Thai equity market by identifying undervalued stocks where share prices remain sluggish despite resilient earnings growth since the Covid-19 period. The report notes the Thai stock market’s evolution into a highly traded, liquidity-driven environment, with 47% of this year’s volume handled by retail and local institutions, and a further 35% by direct market access (DMA).
CLSA screened their coverage stocks, comparing earnings recovery versus share price performance since the Covid-19 downturn. Excluding cyclical plays to mitigate global correction risks, they found that several names—particularly in the consumer, consumer finance, and tourism-related sectors—exhibit strong earnings momentum, but share prices remain depressed.
Preferred Sectors and Stock Picks
Consumer and tourism-related sectors are CLSA’s favored areas, citing likely seasonal improvement and a windfall from Chinese travelers redirecting away from Japan. Notably, consumer stocks like CBG, OSP, CPALL, and CPN, as well as tourism names such as AOT, MINT, CENTEL, ERW, and BDMS, fit the value thesis.
CLSA reiterates “top pick” status for CPALL and CPN, expecting both to benefit from an eventual tourism rebound. CPALL’s downside risk is seen as limited given attractive forward price/earnings (PE) multiples (14.9x/14.1x for FY25/26) and operating leverage potential—a 0.5% GPM (gross profit margin) rise could boost earnings by 4%. CPN’s defensiveness is underpinned by rental rate flexibility and robust traffic drivers.
Conversely, CBG and OSP’s outlook is clouded by Myanmar’s political turmoil, with potential earnings dilution up to 20% in 2026. Within tourism, MINT’s earnings prospects may be underestimated due to market overlooking interest costs on perpetual bonds, while CENTEL and ERW have outperformed year-to-date thanks to high exposure to Thai tourism.
BDMS faces headwinds from a drop in Cambodian patients, though Thai and international patient revenue continued to grow in October. However, a softer Thai economy could weigh on results into 2026.
Cautious Stance on Consumer Finance
CLSA expresses neutrality on consumer finance, viewing expectations as high with much optimism already priced in. Recent share price corrections for MTC and TIDLOR seem justified from a valuation perspective, and any earnings misses could trigger further sell-offs.
Other Noteworthy Stocks
Education provider SISB is cited as undervalued, facing temporary pressure from student number concerns, but CLSA expects growth to return following a new campus opening in 2027. ICHI and TOA, not under formal coverage, also meet CLSA’s screening criteria, trading at 11-12x forward PE with attractive 7-8% dividend yields, and both hold net cash positions.
Despite broad macro headwinds, CLSA believes selective opportunities exist among Thai consumer and tourism stocks, with defensive characteristics, resilient earnings, and undemanding valuations making them attractive in the current environment.
