AOT, MINT and CENTEL Are Top Picks as Beneficiaries from Thai-Chinese Visa Waiver

Tourism-related stocks in the Thai stock market made a run yesterday as seen in Airports of Thailand Pcl. (SET: AOT), a major airport operator in Thailand, saw its share price rise 4%, following the announcement of Thai-China visa waiver. 

Thailand and China will permanently waive visa entry requirements for their citizens from March 2024, according to the statement from the Thai Prime Minister Srettha Thavisin on Tuesday.

The Thai PM said that this will improve the relationship between Thailand and China.

The agreement is seen to boost tourism between the two countries tremendously as Chinese travelers used to be Thailand’s number one arrivals before the pandemic.

Mr. Koraphat Vorachet, Head of Investment strategy of Krungsri Capital Securities (KCS) stated that on Tuesday, the Thai Prime Minister Srettha Thavisin gave an interview after the meeting with the cabinet on the topic of the waiver of visa entry requirements for Chinese citizens starting from 1 March 2024 onwards, as tourists from Thailand and China can go roundtrip to one another without visa required (permanently free visa).

The analysts saw the measure as an upside for Thailand’s tourism sector in 2024, especially the trend for foreign tourists in the country that is expected to reach 32-35 million this year. The number of expected tourists are also seen to support the service account in 2024, heading in an even more positive direction compared to the previous estimation, as it will strengthen THB to be continuously stronger. The latest value of THB was THB 34.2 a dollar, having chances to strengthen further to THB 34 a dollar in the short-term, and the direction of fund flow looked to be positive.

In terms of investment strategy, the benefits are among tourism sector, such as Airports of Thailand Public Company Limited (SET: AOT), hotel sector, such as The Erawan Group Public Company Limited (SET: ERW), Central Plaza Hotel Public Company Limited (SET: CENTEL), Minor International Public Company Limited (SET: MINT), airline sector, such as Asia Aviation Public Company Limited (SET: AAV), Bangkok Airways Public Company Limited (SET: BA), retail sector, such as CP ALL Public Company Limited (SET: CPALL), and restaurant sector, such as After You Public Company Limited (mai: AU).

The focus is on AOT, CENTEL, and MINT, as these stocks are expected to regain their profits in 2024. Moreover, CPALL, having branches for around 10% in tourist areas, is another stock to take positive sentiment.

According to the Refinitiv consensus, it estimated the revenue of AOT in 2024 (October 2023 – September 2024) to be at THB 71.190 billion with net profit in Q1/2024 (October-December 2023) of THB 5.386 billion. The net profit in 2024 (October 2023 – September 2024) is estimated at THB 24.356 billion with an average target price of THB 76.09 by 18 brokers.