Thai tourism, banks back in focus

THAILAND’S tourism and banking industries are beginning to win back investor attention, with fresh debates emerging over earnings resilience, capital strategies and the country’s long-term growth story.

Market watchers expect the coming two years to be shaped by a tug of war between cyclical headwinds and new opportunities in global events, travel demand and financial sector reforms.

Maybank Investment Bank Group Research (Maybank IBG), after recent meetings with 19 institutional clients in Malaysia and Singapore, reports that sentiment on Thai equities is slowly improving, with investors showing more curiosity about the travel and financial services sectors than earlier this year.

Tourism: From overreliance to diversification

The brokerage notes a shift in how investors view Thailand’s tourism industry, traditionally seen as overly dependent on Chinese visitors.

“Although the majority of them still have no exposure to Thai hotel stocks (as market caps are too small, low dividend yield and high gearing), several funds recently invested in Airports of Thailand pcl (AOT) as the stock has fallen by 35% year-to-date (y-t-d),” Maybank IBG writes in its recent report.

Conversations suggest more confidence in Thailand’s efforts to broaden its visitor mix.

“As listed hotels have diversified their guest mix more towards European, Middle East and Indian visitors, we received less pushback about the Thai tourism sector for its overreliance on Chinese travelers,” the brokerage adds.

Despite short-haul demand concerns from China and South Korea, long-haul travellers are expected to cushion the blow.

“The government needs to put more effort into increasing tourism (we expect 37 million tourists in 2026), particularly from high-spending markets such as Europe, the United States, Oceania and the Middle East,” it says.

The outlook is also supported by upcoming events, including Tomorrowland, the world’s largest electronic music festival, which debuts in Thailand in December 2026, and the arrival of Formula 1 racing in 2028. These global showcases are expected to strengthen Thailand’s international brand and tourist flows.

Airport play

AOT is drawing renewed attention after its sharp y-t-d share price correction. Investors appear more comfortable with its downside risks.

“Foreign investors agreed with us the worst-case scenario for AOT has been mostly priced in,” Maybank IBG highlights.

One sticking point remains the duty-free concession with King Power, where a renegotiation is due by October 2025.

“Concession revenue from King Power’s duty-free business could be slashed by 40% to 7.8 billion baht in 2026 (under 20% revenue sharing), and 170 billion baht capital expenditure could be recognised for construction of the South Terminal at Bangkok,” the research house notes.

Still, it expects King Power to keep its concession and foresee upside from a potential increase in passenger service charges.

Hotels and hospitality: Mixed views

In hotels, investors are taking a closer look at Minor International pcl (MINT) and Central Plaza pcl Hotel (CENTEL).

Maybank IBG observes: “Several clients expressed strong interest in MINT as it’s considered a laggard with low price-to-earnings (PE) multiple.

“Investors expect earnings upside from asset-light strategy, profit sharing from Pop Mart Thailand (around 8% of MINT’s earnings in 2024), and lower interest expense as it will repay debts after establishing a real estate investment trust in the first quarter of 2026 (1Q26).”

Meanwhile, Asset World Corp pcl (AWC), despite being a top pick, still faces scepticism.

“Clients we met remain sceptical about the long-term earnings growth of our top pick AWC, and whether it deserves to trade at a premium valuation,” Maybank IBG points out.

Banking: Stability meets uncertainty

Investor conversations also turned to Thai banks, which have outperformed the market this year but now face questions on sustainability.

“Most investors remained underweight Thailand due to its weak economic recovery and slow earnings growth. However, they are more interested in the Thai stock market versus when we last met them in 1Q25,” Maybank IBG says.

Dividend stability is at the heart of the discussion.

“Investors are wondering whether Thai banks can maintain stable dividends in 2026.

“The big banks’ earnings are likely to decline year-on-year due to lower net interest margin (NIM) and mark-to-market gains/loss on investments,” the brokerage cautions.

A potential 50-basis-point policy rate cut in the next year could also weigh on NIM.

Still, banks are expected to offset pressures by cutting credit costs and controlling operating expenses.

Maybank IBG highlights that investors asked pointed questions on individual banks.

For Kasikornbank, concerns are centred on asset quality and capital strategy after the CEO delayed a 10% return-on-equity target, while Bangkok Bank is viewed as stable with a strong balance sheet but at risk of being a “value trap” if dividend policies stay unchanged.

Krungthai Bank is liked for high return on equity and conservative loan portfolio, while there are doubts over dividend resilience for Siam Commercial Bank and TISCO Financial Group if earnings soften.

TMBThanachart Bank (TTB) is seen with limited downside and tax-driven return-on-equity improvements, while Kiatnakin Phatra Bank is applauded for active capital management and solid NIMs.

Overall, Maybank IBG maintains a cautious stance: “We are ‘neutral’ on Thai banks and expect they will perform in line with the market after outperforming by 17% y-t-d in 2025.”

Still, the brokerage singles out Bangkok Bank as its favourite pick.

“Our top pick remains Bangkok Bank for its well diversified income (25% loans from overseas and 16% from Bank Permata), solid balance sheet and attractive valuation.”

Essentially, Thailand’s financial and tourism plays remain a mixed bag for foreign investors.

While airports and marquee events point to upside in tourism, questions linger over earnings visibility in hotel groups.

Meanwhile, banks are being tested by narrowing margins but still offer reliable dividends and, in some cases, the prospect of share buybacks.

As Maybank IBG sums up, the near-term outlook is one of pragmatism rather than exuberance: investors are curious, more engaged than before, but still cautious about calling a full rebound.