Morgan Stanley Expects Positive Outlook on Consumer and Healthcare ahead of 4Q Earnings Season

Morgan Stanley expected a rebound in tourism, sustained growth in farm incomes and improved mobility should support sales growth of Thailand consumer and healthcare stocks in the final quarter of 2022.


As 4Q22 results are starting to roll out in upcoming weeks, investors are looking into stocks that should have had the best performance in the fourth quarter last year and some positive economic data was pointed out by Morgan Stanley that should give a better outlook on consumer and healthcare sectors.


Morgan Stanley noted that the Private Consumption Index was up 5.5% YoY in 4Q22, while the Consumer Confidence Index rose to an average 47.9 in the quarter, compared to 43.6 in the third quarter and ending higher at 49.7 in December.

The Farm Income Index was up 16.5% YoY in 4Q, driven by sustained increase in rice and sugarcane prices. The index was up 13% of full-year 2022.

Meanwhile, international tourist arrivals in Thailand were 10.6 million in 4Q22, compared to 885,000 in 3Q. In the month of December, total tourist arrivals increased 28% MoM to 2.2 million, which is 57% of the December 2019 level. During 4Q, the Consumer Price Index moderated to 5.8% YoY in 4Q, compared to 7.3% in 3Q. Minimum wages were raised 5-7% in October, the first time in two years.


For 4Q22 performance, Morgan Stanley chose CP All Public Company Limited (SET: CPALL), Central Retail Corporation Public Company Limited (SET: CRC), Bangkok Dusit Medical Service Public Company Limited (SET: BDMS) and Home Product Center Public Company Limited (SET: HMPRO).

Morgan Stanley estimated low-teens SSSG for CPALL’s 7-Eleven, high-single digit SSSG for Makro, and low-single digit SSSG for Lotus. Improved mobility, more year-end events, and rising tourism are supporting factors.

CRC‘s management alluded to exceeding its 2022 revenue and GPM guidance in its CEO forum earlier this week.

Top-line growth for BDMS is expected to increase 1% YoY, driven by 68% recovery in international; 103% of pre-pandemic levels (vs. 3Q’s 71%), which would be offset by 2% YoY in domestic revenue from a high base.

Meanwhile, SSG for HMPRO is expected to be in the low-single digit level given a high base for October-November and some improvement in December.