Auto sector to rebound in Q3
Play
The earnings of listed automotive companies are expected to rebound from the third quarter onwards after bottoming out in the second quarter, influenced by the end of the first-car-buyer scheme.
Analysts from many securities companies agreed that trading volumes in the auto sector became less intense after moving on from the peak stimulated by last year’s first-car tax-incentive programme. Financial figures for listed auto-parts companies in the second quarter should decline.
Kiatnakin Securities noted in its research that the slowdown of domestic vehicle purchases and the baht’s appreciation would continue to put pressure on auto exports and stocks in the second half. However, the decline in auto stock prices has already reflected the risks and expected improvement in the financial performance of auto-parts companies in the third quarter will brighten auto stocks again.
The brokerage recommended “overweight” on auto stocks, with Thai Stanley and Aapico Hitech among outperforming stocks. The research noted that vehicle production in the second quarter was expected to drop by 14 per cent from the first quarter but still grow by 13 per cent year on year.
Kiatnakin Securities projected auto production this year at 2.55 million units, growth of 4.4 per cent from 2012.
