Maybank Securities (Thailand) (MST) reiterated its ‘Neutral’ rating on Thailand’s automotive sector, citing a sluggish earnings outlook. The brokerage firm expects the sector’s core earnings to slip 2% year-on-year in the fiscal year 2025 and 1% in the fiscal year 2026, amid industry headwinds such as restrictive auto loan approvals and softening export demand to key markets.
Maybank’s top pick stock is AAPICO Hitech (SET: AH), rated ‘Buy’ with a target price of THB 15.4 per share, thanks to its projected 11% core earnings growth in the fiscal year 2026, robust dividend yields of 6-8% through the fiscal year 2025-27, and its advantageous position as the only stock, under the broker’s coverage, with established electric vehicle (EV) customers.
The analyst anticipates that EV-driven production will help Thai auto output recover by 5% in 2026, while only AH is positioned to benefit due to its contracts with automakers such as BYD and Chery.
Other stocks under the firm’s coverage—Somboon Advance Technology (SET: SAT) and Thai Stanley Electric (SET: STANLY), with price targets of THB 13.2 and THB 162, respectively—are rated ‘Hold’. These companies are expected to see limited benefit from the EV transition, yet maintain strong dividend profiles (about 7-8% yield for the fiscal year 2025-27), low debt, and healthy free cash flow.
Thai exports fell 12% year-on-year in Jan-Aug 2025, impacted by weakness in two of three major export markets. Exports to ASEAN (about 30% of Thai CBU exports) are expected to decline further due to tariffs and rising EV adoption, while Oceanic exports (also 30%) are likely to remain weak until Japanese automakers introduce cleaner models in late 2026-2027, following stricter carbon emissions standards implemented by Australia in July 2025.
Overall, Maybank Securities expects the Thai automotive sector to remain challenged by weak exports and industry headwinds, but notes that strong dividend yields and AH’s EV exposure offer select opportunities for investors during this transition period.
