Japan leaving/China coming!

Ok slightly sensationalist headline, because Japanese firms are still heavily investing in here however at a slower growth rate and we’ve commented here before that Japanese automanufacturers are looking more closely towards Indonesia for the following reasons:

The perception that Indonesia is now politically less risky and cheaper than some neighbors is adding to the allure of the world’s fourth-most-populous nation, even as investment growth is set to cool before elections this year. The nation has overtaken China and India as the most promising country for Japanese companies for business development, according to a Japan Bank for International Cooperation survey.

“Indonesia’s appeal includes a sizable labor force and consumer market,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. who has worked at Singapore’s central bank and the International Monetary Fund. “Indonesia has its own share of political uncertainties ahead of elections, but they must look negligible compared to the drama playing out in the streets of Bangkok.”

Source: Bloomberg

The fact does remain that Thailand’s infrastructure is a helluva lot better than what Indonesia has today, if you really think traffic is awful here in Bangkok. Please head to Jakarta and Manila to see what bad traffic is, also the infrastructure connecting major cities throughout Thailand is still unparralled when compared to Indonesia hence why we still see headlines/articles like this

More and more Chinese vehicles are reaching overseas markets, however, and Thailand is likely to become a key destination in coming years for both exports and assembly plants. Already Sunlong claims to have the largest annual market share in sales of buses in Thailand, such as coaches fuelled by liquefied natural gas.

Last year, China’s largest carmaker, SAIC, announced a joint venture with Thailand’s CP Group to assemble cars in Thailand under the MG marque, the British brand sold to Chinese owners in 2005. Production is slated to start with 50,000 units this year.

Great Wall Motors, known for pickup trucks and sport utility vehicles (SUVs), was also looking to invest $300 million a plant in Rayong with annual capacity of 100,000 vehicles. However, last week it said it was putting its plans on hold because of concern about the country’s protracted political standoff.

Source: Bangkok Post

So all in all what does this mean for the listed companies here? Well we have SAT, AH, TRU and STANLY which are the main automanufacturers here, and what we suspect we’ll see over time….is well frankly the same as we’ve seen over the past 6-7 years, only because Thailand does still have the capability to export automobiles to its neighbouring countries, the cutely named CLMV nations which are all brand new emerging economies whose GDP numbers and GDP per capita, whatever statistic you look at, will only continue grow over the next 5-10 years.

Stocks in the news (aot, bbl, cpall, hmpro, ktc, pf, robins, tisco, true) 05.03.14

AOT

AOT says political unrest is pressuring operations. Passengers in Suvarnabhumi fell 9% but passengers at provincial airports increased supporting it operation. Foreign funds request its business plan to decide whether continue to invest or divest. (Khao Hoon, 05/03/14)

Comment: So as we’ve commented in the past, Bangkok is hurt yes, but the rest of Thailand is still growing

BBL

BBL warns of flat Q1 loan growth – Bangkok Bank, Thailand’s largest lender by assets, expected flat growth in its corporate lending during the first quarter of this year amid internal and external uncertainties, reinforcing signs of weak demand in private investment. (Bangkok Post, 05/03/14)

CPALL

CP All projects 15% revenue gain – CP All (CPALL), the operator of 7-Eleven convenience stores in Thailand, targets 2014 revenue growth of 10-15% driven by its branch expansion plan as its business remains resilient to the ongoing political conflict. It is also counting on a full year of income from Siam Makro (MAKRO) following CP All’s acquisition of the cash-and-carry chain. (Bangkok Post, 05/03/14)

Comment: Only CPALL and MAKRO are still committed to growing this year in the consumer space, perhaps this + the refinancing news will remove the over hang on the stock price.  Continue reading Stocks in the news (aot, bbl, cpall, hmpro, ktc, pf, robins, tisco, true) 05.03.14