No Direct Impact From Announced Tax Changes But Awaiting Further Clarity
Thailand has announced a dual visa waiver programme with China that will start in Mar 24, which is set to boost incoming tourist arrivals for 2024. Thailand’s government has also announced tax changes for several liquor products and entertainment venues to help boost tourism spending. Backed by favourable tailwinds, THBEV is trading at attractive levels at -2SD to its long-term average PE. Maintain BUY with an unchanged SOTP-based target price of S$0.70.
WHAT’S NEW
• Regional partnership. Starting 1 Mar 24, Thailand and China will permanently waive visa requirements for incoming tourists from both countries. This is after a temporary visa waiver that Thailand previously implemented in Sep 23 and was expected to end in Feb 24. In our view, this is likely to attract Chinese tourists that have been driven away by increased safety concerns after the shooting incident in Bangkok. With 3.5m tourists in 2023, Chinese tourists were the second-largest source of foreign visitors, behind Malaysia. Furthermore, Chinese tourists were the largest source of visitors pre-COVID-19 (2019) at around 11m, implying potential further upside in 2024. With the permanent visa waiver and assuming increased flight capacity, we reckon that this would benefit consumer companies such as Thai Beverage (THBEV) as incoming tourist numbers improve. However, downside risks may come from higher-than-expected airfares and a sluggish economy in China.
