Leasing

Government to spend B100bn budget for low incomers Neutral

Leasing

- Money injection for low incomers

The government has planned to stimulate the economy and purchasing

power by injecting B100bn budget (FY2015 budget) into the economy

system, starting from October 1. For low-income farmers, the Ministry of

Agriculture and Cooperatives will provide financial support to lower

production cost. Initially, there will be fertilizer and pesticide price subsidies

for minor farmers with no more than 20 rai of land. For low incomer,

negative income tax (NIT) measure will be implemented under the name

"poverty relief for hard workers". Employed people aged 15-60 with under

B80,000/year income will receive tax refund of at least B2,000 up to

B6,000. Eighteen million Thai people would benefit from this policy, and

B55bn/year budget will be spent on it.

- GCAP, TK, GL, SAWAD, SINGER, AEONTS to benefit most

GCAP, TK, GL, SAWAD, SINGER, AEONTS would benefit most from the

government's measures. 1) Supporting measure for low-income farmers

would benefit GCAP, TK, GL, SAWAD, and SINGER. GCAP (agricultural

vehicle leaser; 100% of client base is farmers) would get the most

advantage, followed by TK and GL (motorcycle leasers) and SINGER (25%

of client base is farmers). Although the support is not in the form of money,

price subsidies on fertilizer and pesticide (19% of total production cost,

based on rain-fed production yield per rai) would boost purchasing power

and increase farmers' confidence on crops production, especially rice

production that has many problems. 2) Supporting measure for low

incomers would benefit every company. Particularly, AEONST would get the

most advantage from 8% hike in civil servants' wage. Civil servants account

for 20-30% of AEONTS's client base, while only 5% of SINGER's clients are

civil servants.

- 2H14 top picks: GCAP, AEONTS, SINGER, KCAR

Leasing sector's 2H14 top picks are GCAP(FV@B6), AEONTS(FV@B121),

SINGER(FV@B25) and KCAR([email protected]) for their potential strong earnings

in 2H14