Tisco: Listed firms set for 49pct Q2 profit hit

06-Aug-2020 Intellasia | BangkokPost | 6:02 AM Print This Post

Aggregate net profit of SET-listed companies likely fell by 40-50 percent year-on-year to 80-90 billion baht in the second quarter after lockdown measures crippled economic activity, analysts say.

The banking sector and some listed firms have already announced their second-quarter operating results, posting an aggregate net profit of 41.2 billion baht.

First-half net profit represents about 35 percent of full-year net profit.

Apichat Poobunjirdkul, senior strategist at Tisco Securities, said 133 SET-listed firms under the securities house’s coverage, representing 76 percent of total market capitalisation, will likely announce a 49 percent year-on-year drop in net profit.

Factors pressuring market sentiment include geopolitical tensions between China and the US and domestic politics as the Thai cabinet prepares to announce a list of new members, Apichat said.

Domestic political developments warrant ample concern because all eyes will be on the upcoming cabinet reshuffle, fiscal 2021 budget talks and students’ political rallies, he said.

A second-wave outbreak of the coronavirus in some countries, the continued economic slowdown and the end of some stimulus packages are factors needing close attention, Apichat said.

Some 93 percent of 562 SET-listed companies reported first-quarter earnings of 157.1 billion baht, up 85 percent year-on-year.

Revenue from sales rose 29 percent year-on-year to 1.8 trillion baht. Most revenue came from industries clustered in energy, finance and property.

Wilasinee Boonmasungsong, vice-president for research at Globlex Securities, said the combined net profit of SET-listed firms likely bottomed out in the second quarter with the end of lockdown measures to contain the domestic outbreak.

Many listed firms are expected to postpone disclosing their second-quarter operating results. As many as 31 firms have asked for delayed financial reporting, including Thai Airways International, Ms Wilasinee said.

Sorrabhol Virameeteekul, senior vice-president of Kasikorn Securities, said the securities firm forecasts aggregate net profit of SET-listed companies to drop by 50-60 percent before starting to recover in the second half after economic activity picks up.

Thailand’s stock market has limited upside potential because its price-to-earnings ratio is the highest in the region, according to Asia Plus Securities, which recommends maintaining local equities at 30 percent of the investment portfolio.



Category: Thailand

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