• SGX welcomes 5 new Thai SDRs which allow investors to trade Thai blue-chip companies in the same way they would trade stocks listed in Singapore. The 5 new SDRs are Advanced Info Service (SGX SDR stock code: TADD), Delta Electronics (TDED), Gulf Energy Development (TGED), Kasikornbank (TKKD) and Siam Cement Group (TSCD).
   
• Thailand is expected to grow up to 3.3% in 2024 driven by exports, government stimulus and continued recovery in tourism. In total, the 8 Thai SDRs cover more than 40% of the SET50 benchmark and each of the 8 SDRs represent a different sector.
   
• Since SDRs were introduced in May 2023, the initial 3 SDRs – AOT, CP All, and PTTEP – traded twice as much, at S$300,000 in average daily turnover. Retail demand has also tripled with consumer names CP All and AOT attracting the most buy and hold interest.
   

Outlook for Thailand’s Economy in 2024

After growing 1.9% in 2023, Southeast Asia’s second largest economy is expected to grow 2.8% to 3.3% this year. Exports, which is a key driver for Thailand, are projected to grow 2% to 3% in 2024, according to the Joint Standing Committee on Commerce, Industry and Banking.

• Government stimulus – Private consumption, supported by government stimulus is seen to be a key driver of the potential growth acceleration, with private consumption accounting for c.60% of Thailand’s GDP in recent years. A 500 billion baht handout scheme to stimulate the economy is expected to boost consumption spending in Thailand when implemented. Apart from the digital wallet, Thailand’s government has also approved tax cuts on alcoholic beverages and entertainment venues with the aim of boosting tourism.
• Continued recovery in tourism – In addition, the International Monetary Fund (IMF) also estimates that inbound tourism will rebound to pre-pandemic levels by 2025 as tourist arrivals gradually recover. International tourist arrivals to Thailand exceeded 28 million in 2023 and more than doubled 2022’s levels, but still remain below its peak of 40 million in 2019. The Kasikorn Research Centre expects the country to receive 36 million tourists in 2024.
   

5 new Thai Singapore Depository Receipts (SDRs) for trading in Singapore

From 1 April, investors are now able to trade 5 more Thailand-listed companies on the SGX, in the same way they would trade a stock on the SGX-ST. The 5 new Singapore Depository Receipts (SDRs) are – Advanced Info Service (SGX SDR stock code: TADD), Delta Electronics (TDED), Gulf Energy Development (TGED), Kasikornbank (TKKD) and Siam Cement Group (TSCD).

Same as the initial batch of, the 5 new SDRs are part of Thailand’s benchmark SET50 Index. In total, all the 8 SDRs now cover more than 40% of the SET50 Index, with each SDR representing a different sector. The 8 underlying stocks listed below have a combined market capitalisation of THB4.7 trillion (S$175.5 billion).

Source: SGX, Bloomberg (Data as of 29 March 2024).

What are SDRs and why?

SDRs are depository receipts which represent beneficial ownership in the underlying securities listed overseas but is tradable by all investor types locally in Singapore like a stock (i.e. traded in SGD, local trading hours, 100 lot sizes, SGX-ST trading regulations). SDRs are issued on an unsponsored basis and are not issued by the underlying companies. Some benefits include cost efficiency, convenience, transparency, fungibility and CDP custody.

Investors in SDRs are entitled to certain benefits attached to the underlying securities, such as dividend and other non-cash distributions. However, SDR investors should note is that they do not have voting rights, as they are not direct shareholders of the underlying Thai stocks.

Since SDRs were introduced in May 2023, the initial 3 SDRs – AOT, CP All, and PTTEP – traded twice as much, at c.S$300,000 in turnover each day on average. Retail investor demand (in assets under management) has also grown 3 times with consumer names CP All and AOT attracting the most buy and hold interest.

A look at the 5 new Thai SDRs:

• Advanced Info Service (SDR code: TADD)
  • AIS is Thailand’s largest telecommunications and GSM mobile phone operator with a 48% revenue market share and 90% nationalwide population coverage. AIS is also partially owned by Singtel Strategic Investments Pte Ltd. with a 23.31% stake.
  • In FY23, its core service revenue grew 4.2% year-on-year due to its acquisition of Triple T Broadband PLC, and net profit grew 12%. AIS expects 5G technology and 5G market value to continue growing in 2024 as consumers opt for 5G plans with higher data offering and distinctive value of high speed and low latency, to enjoy the enhanced user experience and improved efficiency.
  • Together with Singtel and GULF in February 2023, the joint venture commenced construction of a new 20+ MW data centre which is scheduled to begin commercial operations in 2025 to serve greater demands of enterprises and cloud service providers in Thailand and overseas.
     
• Delta Electronics (SDR code: TDED)
  • Delta Electronics is Thailand’s largest electronics manufacturer and is the largest company in the SET50 Index. It has diversified revenue sources, with majority from US, Germany and China.
  • Despite a softer 4Q23, sales revenue for the quarter grew 9% year-on-year and net profit grew 15%. Delta Electronics continued to see another year of record performance with FY23 revenue and net profit growing 23% and 21% year-on-year respectively.
  • Delta Electronics maintains that demand for its products for global customers should continue to grow, especially in e-mobility and digitalisation including energy-efficient datacenters, telecom power and EV charging infrastructure.
     
• Gulf Energy Development (SDR code: TGED)
  • GULF is Thailand’s largest private power producers which manages a portfolio of gas-fired and renewable power projects that serve both public and private clients in Thailand’s main industrial zones.
  • GULF reported a 23% year-on-year growth in total revenue, primarily driven by an increased power generation capacity following the commercial operation of its Gulf Pluak Daeng project with a combined installed capacity of 1,325 MW, which had an average load factor of 90% in 2023.
  • GULF anticipates its total revenue in 2024 to increase by approximately 25-30% from 2023, driven by the projects that are scheduled for commercial operation. These include gas-fired projects in addition to solar rooftop projects and domestic so lar farms.
     
• Kasikornbank (SDR code: TKKD)
  • KBANK was rated Thailand’s best domestic bank in 2023. KBANK and its subsidiaries reported an increase of 18.6% in net profit year-on-year due to the low base coupled with the economy that has begun to gradually recover in some areas – citing a K-shaped recovery as the Thai economy continued to grew in an uneven manner.
  • KBANK has outlined a 3+1 strategy to improve the bank’s performance, enhancing its lending products and driving wealth management fee income. The bank has 21.7 million KPLUS users and forecasts to grew its users by 20% to 30% by 2026. Internationally, KBANK is focusing on expanding its banking business in Vietnam, Indonesia and China.
  • With a more optimistic outlook for banking, KBANK is targeting 3-5% loan growth in 2024 following 0.2% decline in loan growth in 2023. KBANK is also targeting to achieve double-digit ROE by 2026 (FY23 ROE at 8.29%).
     
• Siam Cement Group (SDR code: TSCD)
  • SCG is ASEAN’s largest industrial material conglomerate with three core businesses – Cement-building materials business, Chemicals business, and Packaging business.
  • SCG’s profit for the year grew 21% year-on-year including gains from fair value adjustments, despite registering declines in revenue from sales mainly from lower products prices and the deconsolidation of SCG Logistics. SCG expects the Thai market to still be the key growth driver driven by government infrastructure projects.
  • SCG has also advanced into the integrated energy transition solutions business, delivering solar energy for residential market, factories, industrial estates, hotels, shopping malls, and hospitals through its Smart Grid technology, while accelerating development of green solutions to address eco-friendly trends.
     

Further Resources and Research

Underlying Thai-listed company’s Investor Relations page

• CPALL
• PTTEP
• AOT
• AIS
• SCG
• KBANK
• GULF
• DELTA
   

Related Analyst Reports

• CPALL: CGS-CIMB – CP ALL update : 4Q23 results above expectations
• AOT: Beansprout – Airports of Thailand SDR : Potential beneficiary from visa requirement waivers
• AIS: Phillip Capital – Advanc update : Enhance ecosystem to gear up for new S-Curve
• SCG: CGS-CIMB – Siam Cement update : Unplanned outrage at Long Son project
• GULF: Phillip Capital – Gulf update: Venturing into waste-to-energy investments
• DELTA: CGS-CIMB – Delta Electronics (Thailand) update : More earnings downside risks ahead
   

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