KKPS says AI drives FDI into Thailand, picks DELTA, GULF and WHA to play the data center theme

IndustryAnalyst
โดย Kaohoon·TH·Read original
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Supapong Iamkong-aek, an analyst at Kiatnakin Phatra Securities, or KKPS, said investment in artificial intelligence is entering a new cycle, with the focus shifting from developing the technology to investing in the infrastructure needed to support AI's expansion, including data centers, power systems, electronic components and connectivity. This is an opportunity for Thailand to attract a new wave of foreign direct investment. Although only a limited number of technology and electronics companies are listed on the Thai stock exchange, off-market businesses tied to the downstream side of AI, such as Analog Devices and Seagate, have production bases in Thailand and have seen a significant rise in investment promotion applications to the Board of Investment, or BOI. On data center investment in Thailand, the value of BOI promotion applications in the first quarter exceeded 700 billion baht, but slowed markedly in the second quarter as some foreign investors waited for clarity on data center regulations in Thailand. Thailand currently has fewer than 1 GW of data centers actually in operation, while Malaysia has about 7 GW. Given the steady flow of BOI applications, Thailand's data center capacity could rise to 3 to 5 GW within the next three to five years, and combined with the new Power Development Plan, Thailand is preparing as much as about 9 GW of power capacity to support data centers. On electronics stocks, the analyst said Delta Electronics (Thailand), or DELTA, remains the standout, given its large market capitalization and its direct link to the AI theme, with a price-to-earnings ratio as high as about 100 times, compared with around 20 to 30 times for Nvidia. Among power plant operators, Gulf Development, or GULF, is the top pick, while in the industrial estate group, WHA Corporation, or WHA, is the top pick because it has a larger share of revenue and land area tied to data centers than AMATA.

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