JPMorgan has upgraded its outlook on Thailand equities to ‘Neutral,’ spotlighting TRUE, CPALL, and BBL as standout among other picks poised to benefit from improving market conditions, noting that a stable political backdrop is fueling public spending and supporting domestic business confidence.
This renewed optimism has sparked a capital expenditure cycle, with an improved outlook for earnings growth, liquidity, and undemanding investor positioning attracting foreign capital back to Thai markets.
The report remains constructive on the prospects for sectors linked to global AI infrastructure. JPMorgan highlighted the ongoing expansion in datacenter-related capex, which provides an earnings upside for Thai electronics firms. Delta Electronics (DELTA) remains JPMorgan’s preferred stock due to its prolonged DC power relevance. Meanwhile, Hana Microelectronics (HANA) has been highlighted as a pivotal second pick, given its breakthrough with AI customers that provides significant optionality compared to domestic peers.
The bank acknowledged downside risks from elevated energy prices, which could pressure consumer sentiment as Thailand relies heavily on oil and gas imports. While inflation concerns persist, JPMorgan economists expect the Bank of Thailand to maintain its policy rate at 1.00% through 2026-27, as inflation remains under control. Consumer sector stocks might face headwinds from rising input costs, but energy and utility sectors could benefit from earnings support.
Regarding currency movements, JPMorgan believes the recent devaluation of the Thai Baht against the US Dollar is unlikely to be a major concern, as it could enhance the competitiveness of exports and bolster tourism revenues.
The bank’s 12-month targets for the SET index are 1,400/1,800/2,000 in bear, base, and bull scenarios respectively, reflecting about a 9% earnings upgrade over the coming year. JPMorgan favors IT, Telecom, Financials, and Healthcare sectors, while remaining cautious on Consumer Staples and Consumer Discretionary. Top stock picks include TRUE, BH, DELTA, HANA, BBL, CPALL, and MRDIYT.
