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Thursday, June 20, 2024

Earnings improvement steady but uneven

Third-quarter profit recoveries for Thai listed companies are on track to be stronger in some sectors (especially Electronics and Food) than in others. Earnings quality remains a key theme, given the ongoing risks, including domestic political tension, US election uncertainty and macroeconomic risk tied to resurgent global Covid-19 infections.

Market anticipation of vaccine development, more economic stimulus and a sustained macro recovery (assuming no new round of tight lockdowns) could limit the downside for the SET in the short term. The market could then start rallying as uncertainties start to abate.

We expect aggregate third-quarter net earnings for the SET to fall 29% year-on-year but rise 43% from the second quarter. Business activity has recovered after the unwinding of the lockdown, so sales have improved…

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