Companies on the Thai bourse, excluding property funds, reported better performances in 2010 due to higher earnings and returns on investment that led their combined net profit to rise 38.98% from 2009, The Stock Exchange of Thailand (SET) revealed. The SET also highlighted the companies’ secure financial positions, while an increase in their investment in fixed assets and capital raising in several industrial groups reflected a sustained recovery in the Thai private sector and its readiness for further expansion.
In 2010, listed companies (excluding property funds) on the Thai exchange had income from sales and services totaling THB7.40 trillion (approx. USD244.90 billion), or 17.67% higher than in 2009. Their cost control efficiency was similar to that of 2009, with a Cost-to-Income ratio of 91.04% in 2010, vs. 90.84% in 2009. Their combined operating profit was THB663.81 billion (approx. USD21.95 billion), a year-on-year (y-o-y) rise of 15.16%, while other income, most of which was gains on investment and foreign exchange, grew 29.57% y-o-y. Consequently, their combined net profit in 2010 totaled THB592.45 billion (approx. USD19.59 billion), up 38.98% y-o-y, with a net profit margin in 2010 of 7.50%, up from 6.38% in 2009.
Most companies reported better performances and wear from more diverse industrial groups, with 443 of them, or 82.65% of all listed firms, ended 2010 with profit, vs. 76.68% of all companies in 2009 and 73.64% in 2008.
The operation efficiency indexes of firms in 2010 improved across the board when compared with 2009, as a result of higher net profit. In 2010, Thai firms’ return on equity (ROE) was 15.48%, a significant rise from 11.98% in 2009, while their return on assets (ROA) rose from 5.51% in 2009 to 7.18% in 2010. In addition, their average debt to equity (D/E) ratio remained low, at 1.16 times, which is similar to that of 2009, while their level of liquidity for debt payment appeared to be high even though interest rates on loans rose during H2/2010.
In terms of investment in 2010, most companies put more money in fixed assets, with 465 firms, or 85.95% of all listed companies, increasing such investments, vs. 80.48% in 2009. Thus, total investment in fixed assets rose to THB405.16 billion (approx. USD13.40 billion) as of end-2010. Every industrial group, except Industrials, Property & Construction, and Non-performing Group (NPG), has raised their investment in fixed assets.
In terms of fundraising in 2010, improved economic conditions and trade on the Thai bourse led companies to raise capital, both on the primary and secondary markets, to the tune of THB90.35 billion (approx. USD2.99 billion), fully 156.82% higher than in 2009. Last year, a total of 11 companies and 4 property funds launched initial public offerings, bringing in THB12.58 billion (approx. USD416.24 million), a 8.63% y-o-y rise, while fundraising through secondary equity offerings totaled THB77.94 billion (approx. USD2.58 billion), soaring 230.66% y-o-y.
In Q4/2010, listed firms on the Thai stock market reported a combined net profit of THB158.76 billion (approx. USD5.12 billion), or 51.44% higher than in Q4/2009, due to higher revenue and gains from investment. This combined net profit figure for Q4/2010 was 5.72% more than in Q3/2010. Furthermore, earnings reports of companies in the Financials and Technology industry groups as well as from the Market for Alternative Investment (mai) showed a sustained increase in revenue, with firms under the Financials group reporting the sixth consecutive quarter of rises in income from core businesses (i.e., from sales and services), and companies under the Technology group and mai also reported their third consecutive quarter of rises in income from core business.
