Pundits warn of earnings downturn amid trade war

The first-quarter net profits of listed Thai companies are projected to decline 13% year-on-year, but grow 16% quarter-on-quarter, according to analysts who warn an earnings downgrade is on the horizon given the trade war.

- NUNTAWUN POLKUAMDEE

The banking sector reported better earnings than expected, said Bualuang Securities (BLS).

The brokerage said the industries expected to have strong year-on-year earnings growth are meat, ICT, transport and tourism.

Sectors projected to post a year-on-year profit contraction are energy, petrochemicals, construction materials, packaging and automotive.

BLS sees downside risks for earnings, with its covered stocks undergoing an average forecast cut of around 7%.

Sectors facing sharp downgrades are construction materials, real estate, electronics, energy, transport and hotels.

During the US-China trade tussle from 2018 to 2019, the earnings forecasts of companies on the Stock Exchange of Thailand (SET) were cut by as much as 27%, noted BLS.