The Thai economy has seen continued recovery since the country’s reopening, with significantly improved mobility and tourist arrivals, while inflation has slowed, improving consumer spending power; as a result, Maybank Securities (Thailand) (MST) maintains its positive view on the retail sector in 2023.
Maybank expects domestic consumption to expand throughout 2023, owing to a recovery in tourism and a government stimulus package, as well as the upcoming national election in May. Lower inflation also boosts consumer purchasing power.
After a solid recovery in 2022 during the re-opening, Maybank forecasts the retail sector SSSG to slow in 2023 but stay positive at 1-5% YoY. New shop openings and increased internet purchases will help drive retail sector revenues.
Maybank maintains its positive view on the retail sector and expects firms to deliver healthy earnings growth in 2023 on optimism SSSG, store expansion and increased profitability. Maybank rates “BUY” on CPALL, MARKO, BJC, HMPRO and GLOBAL. CPALL is the top pick for its leading position in the retail sector. Increased mobility and more tourists should also boost convenience store (CVS) customer traffic.