Bualuang Securities: Floods to Hit GDP by No More Than 0.1%, Listed Company Profits by No More Than 2%; HMPRO, GLOBAL and DOHOME Favored After Waters Recede

Prachachat··TH·Read original
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Summary · why it matters

Bualuang Securities Public Company Limited, or BLS, estimates that the flooding now spreading across many areas will have only a limited impact on the economy and on the profits of listed companies, provided the situation does not drag on and does not spread into major production bases. It expects the floods to affect GDP by no more than 0.1% and listed company profits by no more than 2%, since most industrial and commercial areas of listed companies have not yet been severely affected and damage remains below that of the major floods in 2011. This assessment is in line with the Bank of Thailand, which expects the floods to affect the economy by about 0.03% to 0.10% of GDP, while the Center for Economic and Business Forecasting at the University of the Thai Chamber of Commerce estimates damage of about 12.3 billion baht, or 0.066% of GDP, in its base case, and about 20.6 billion baht, or 0.11% of GDP, in a severe case. The key issues to watch from here are the industrial sector and the duration of production stoppages, since prolonged factory shutdowns could add to the impact on earnings. The groups directly exposed to flood-hit areas in the short term include retail, finance, banking, industrial estates and some factories. In retail, BLS sees CPALL, CPAXT, BJC and CRC's food business potentially seeing same-store sales accelerate in the short term on stockpiling of essentials during the floods, but this boost may not significantly affect profits. If same-store sales rise 1% for two weeks, it would add only about 0.04% to full-year same-store sales, not enough to prompt an earnings forecast revision. The group more likely to see a clearer boost after the waters recede is home improvement, where HMPRO, GLOBAL and DOHOME stand to benefit from demand for home repair and renovation. Based on past data, sales for this group typically begin to recover about one month after the situation eases.

Impact on assets 7

Consumer Discretionary▲
Consumer Staples▲
Berli Jucker PCL
BJC
± MixedDemandrelevance

BJC's food business may see short-term same-store sales accelerate on flood stockpiling, but the boost is not enough to affect profits.

Digital Finance & Tokenization▲
CP ALL Public Company Limited
CPALL
± MixedDemandrelevance

CPALL may see short-term same-store sales accelerate on stockpiling of essentials during floods, but the boost is too small to revise earnings.