Asia Plus Securities (ASPS) says investors should consider 20 stocks that are expected to benefit from a Chinese economic recovery after the country's first-quarter GDP grew by 4.5%, the highest in a year.
In research published on Wednesday, ASPS said the expansion beat market estimates of 4% year-on-year. The previous quarter Chinese GDP rose by 2.2%, which also exceeded the market forecast of 2%.
March retail sales rose at the highest pace since June 2021, growing by 10.6% year-on-year, compared with the analyst consensus of 7.7% and double 3.5% growth in February.
Industrial production rose 3.9% year-on-year in March, compared with growth of 2.4% a month earlier, the brokerage said.
The unemployment rate was 5.3%, below market expectations of 5.5% and down from 5.6% the previous month. In addition, inflation was below the target of 3%, which is believed to be a factor helping Beijing to stimulate the economy through both monetary and fiscal policies, said ASPS.
"The recovery of the Chinese economy is a driving force for demand to increase, which should help Thai exports. In addition, the return of Chinese tourists will be a major driver for Thailand's international arrivals in 2023," the report noted.
The Tourism Authority of Thailand expects a total of 30 million visitors in 2023, with the latest data indicating 7.5 million foreign arrivals so far this year generating income of more than 220 billion baht. Last week the top five source markets for tourism were Malaysia (80,239), China (77,178), India (31,997), Russia (28,873) and South Korea (21,089).
According to ASPS, local sectors expected to benefit from China's economic recovery include travel, hotels and logistics. In these sectors, the recommended stocks are Airports of Thailand, SCGJWD Logistics, Erawan Group, Central Plaza Hotel and Minor International.
Also poised to gain are rubber and electronics businesses, with the top picks from the brokerage: North East Rubber, KCE Electronics and Star Microelectronics (Thailand). In the property sector, ASPS recommends Noble Development, Sansiri and Origin Property, while Siam Cement and SCG Packaging are the top picks for stocks in the building materials sector.
Energy and petrochemical businesses are also set to benefit as Chinese demand recovers fast, with the recommended stocks Thai Oil and PTT Global Chemical.
In the food and beverage sector, the brokerage recommends Carabao Group and Central Retail Corporation.
The last recommended group is the leasing business, with the suggested stocks Muangthai Capital, Srisawad Corporation and Ratchthani Leasing.
