AMATA and WHA to Flourish amid Chinese Investment with 3-Year Growth Cycle in Land Sales

Kiatnakin Phatra Securities (KKPS)’s analysts recommended buying WHA and AMATA, the major IE operators, after a visit at the industrial zone, which later stated that it had a positive view on the Industrial Estate (IE) sector, with ‘China Plus One’ being a catalyst for direct foreign investment. IE developers are expecting a three-year upward cycle from 2023 to 2025.

The brokerage firm expected WHA to trade at a 2024E PER of 16.2x, compared to 21x long-term average, and AMATA to have a lagging PER of 13.2x, compared to 14x average PER. After visiting AMATA City Rayong, WHA ISIE4, WHA Rayong 36, EEC, EV OEM and supply chains in Thailand.


During the election in Q2, the value of foreign investment reported to the BOI rose 141% year-on-year to THB 149 billion and approvals grew 15% year-on-year to THB 91 billion. Most of them are in the electronic group. Chinese’s participation in approved projects continued to increase from 19% in Q1 2023 to 25% in Q2, followed by Japan (16% in Q1 2023 and 24% in Q2). When considered, it was found that the rapid increase in EV adoption is driving new vehicle registrations in Thailand (12.8% in July) and many new EV OEMs from China have announced additional production investments in Thailand as well.


The private sector gained more confidence after the new PM finally announced. They hope the new government will push the economic growth policies and Thai’s competitiveness in ASEAN to attract more manufacturing FDI, especially EV and other innovation. The incentives and subsidies from the government is a must for sustaining long-term target investment in Thailand.


Meanwhile, WHA and AMATA land sales in this year are hitting a 10-year high, exceeding analyst expectations. In the first half of 2023, AMATA land sale was at 682 rai, compared to a whole year in 2022 at 693 rai. AMATA targeted 1,200 rai at the end of the year, the same sales number as its last high a decade ago. On the other hand, WHA has increased its 2023 target from 1,750 rai to 2,500 rai after reaching 60% of year target at 1,048 rai at the end of June. As the land demand increases, WHA expects another 800 rai sale in this 3rd quarter alone, hitting 74% of its new estimate for the whole year.


The strong demand and limited supply, especially in EEC (YoY 9% supply dropped), prompted WHA and AMATA to increase their Capital Expenditure for this year’s land acquisition by 60-70% to secure their landbank. WHA was able to increase its land price in January and June, pushing up the price by 10% YTD. Analyst believed AMATA will also increase its land price next year which is an upside to Gross Profit Margin.