Bualuang Securities (BLS) stated that the outlook for the Thai stock market in August remains positive, as the recovery in earnings is beginning to broaden beyond a few concentrated industries and into a wider range of sectors. This is evidenced by the upgrade of the market’s earnings per share estimates by 4.2% in July and by 6.3% since the beginning of the year.
The momentum for earnings upgrades has expanded from the energy, petrochemical, and packaging sectors to now include the hotel, transportation, banking, retail, and finance industries. As a result, the proportion of stocks with earnings estimates being revised upwards compared to those with downward revisions has continuously improved, thereby reducing downside risks for the market.
Historically, during upcycles in global manufacturing, foreign capital inflows into the Thai market have typically totaled around THB 160-200 billion over a 10-12 month period. This trend can be attributed to the fact that the energy, petrochemical, and packaging sectors collectively account for about 28% of the total market profits, meaning a global manufacturing recovery tends to support EPS, ROE, and positive valuation re-ratings. This aligns with current market data, as the global manufacturing PMI index reached 52.2 in June, marking the 11th consecutive month of expansion.
In terms of investment strategy, Bualuang recommends a focus on defensive-yield core stocks, coupled with satellite alpha stocks to generate additional returns, across four main themes:
- The renewed cycle of power infrastructure upgradation in Thailand, including the Power Development Plan (PDP) and the upcoming clarity on direct power purchase agreements (Direct PPA) in the next two months, is expected to lead to new investment in transmission lines, benefiting companies such as GULF.
- Defensive high-dividend stocks with robust earnings remain the mainstay in the face of ongoing market volatility; further clarity on the Thailand Individual Savings Account (TISA) could attract fresh capital. The telecommunications sector, in particular, remains among the few to deliver both profit growth and high dividends, driven by higher average revenue per user and gradually declining network costs. ADVANC’s profits are forecast to grow by 24% year-on-year in 2Q26, and TRUE by 48% year-on-year, with the latter expected to offer a dividend yield of approximately 2.1% in 2H26 and 4.2% in 2027, while ADVANC is projected at 1.8% and 4.7%, respectively.
- The tourism recovery, underpinned by government policy, is another theme. For instance, ERW and other tourism sector companies are likely to have passed the profit trough in 2Q26 and will benefit from the upcoming high season. This trend will be further supported by three new major government initiatives totaling THB 1.75 billion, including the ‘Thai Tiew Thai Plus’ co-pay campaign to stimulate domestic tourism, which will offer 500,000 entitlements later in 2026. The state will subsidize up to 50% of accommodation costs (up to THB 3,000 per entitlement) and provide additional e-vouchers worth THB 500 each for food, transport, and other services, benefiting hotel operators such as ERW.
- Selective consumption recovery is also evident, particularly in IT retail, department stores, and the energy drink segment, highlighting CBG as a beneficiary. While overall consumption has not fully recovered across all categories, certain segments have shown significant growth.
