KTBST Securities recommends investment in stocks expected to bounce back as the lockdown is eased following gradual declines in daily new infections.
Mongkol Puangpetra, executive vice-president at KTBST, said there is a high likelihood the government will loosen the lockdown restrictions soon because the recovery rate for the pandemic has now outpaced the infection rate.
The broker expects the easing to be divided into three phases -- the reopening of malls, schools and movie theatres, respectively. Stocks that will benefit from the easing can be divided into three groups, he said.
The reopening of malls in the first phase will increase not only their revenue from rental fees, but also transport companies' revenues from an increase in traffic, said Mr Mongkol.
Stocks expected to benefit from the first phase include department stores such as Central Pattana (CPN) and Central Retail Corporation (CRC), restaurants with physical branches in department stores such as MK Restaurant Group (M), After You (AU), Zen Corporation Group (ZEN), and Oishi Group (OISHI), and public transport operators such as BTS Group Holdings (BTS) and Bangkok Expressway and Metro (BEM).
In addition to malls, construction businesses and furniture and home decoration stores that are temporarily closed because of government restrictions, such as Home Product Center (HMPRO), Siam Global House (GLOBAL), and Dohome (DOHOME), will also be able to resume operations.
IT, communication and electrical equipment businesses such as COM7 (COM7), Jay Mart (JMART), IT City (IT) and Copperwired (CPW) should also gain from the easing measures as KTBST expects these stocks to see sales increases during the high season, especially COM7, which could have particularly high growth potential thanks to the launch of the iPhone 13 in September.
Spa businesses, especially foot massage parlours such as Siam Wellness Group (SPA), which lost over 50% of total revenues during the lockdown because of the closure of branches in Bangkok and the surrounding provinces, are also expected to see improvement in sales after the government relaxes the measures.
The reopening of schools in the second phase will benefit stocks such as Sisb (SISB) and clothing businesses such as MC Group (MC), which closed 245 of its 627 stores. However, the purchasing power of fashion items will take some time to recover, said Mr Mongkol.
Lastly, the third phase will benefit cinemas such as Major Cineplex Group (MAJOR), he said. However, the recovery for the sector is expected to be slower than others as people remain cautious about being in an enclosed space with strangers. Banquet businesses may also recover in this phase, including Minor International (MINT), Central Plaza Hotel (CENTEL) and The Erawan Group (ERW).
