In the midst of the viral outbreak, some companies have turned the crisis to their advantage by adjusting business strategy to sustain net profit growth, paving a path for potential investment opportunities, says Asia Plus Securities (ASP).
Governments have adopted aggressive fiscal and monetary policies to rev up economies battered by lockdown measures, ebbing demand and falling industrial output, said Paradorn Tiaranapramote, assistant vice-president at ASP.
This massive liquidity has flown into stocks, bonds and money market funds, subsequently boosting the price-to-earnings (P/E) ratio in stock markets across the globe.
For the Stock Exchange of Thailand, the current P/E ratio of 19 times is higher than past ratios of 10-11 times during the subprime mortgage crisis in 2008 and the 1997 Asian financial crisis.
"Businesses that will benefit directly from the viral outbreak are involved with digital technology," Mr Paradorn said. "Thailand's industrial base is not based on technology, but we have some companies that can adjust their business strategies and expand amid the crisis, such as telecommunications, construction and the rubber glove industry."
Investment based on the pandemic can be divided into three phases, he said.
The first phase is the ongoing period, in which the outbreak is uncontrolled in many countries, causing higher demand for rubber gloves for medical personnel and public use.
Companies making rubber gloves should reap benefits from higher sales volume, Mr Paradorn said.
"We forecast Sri Trang Agro-Industry to generate a net profit of 3.6 billion baht this year", swinging from a net loss of 148.5 million baht in 2019, he said. "The net profit will come from subsidiary Sri Trang Gloves Thailand, making up around 80%."
Mr Paradorn said Dynasty Ceramic, a ceramic tile maker, has altered its marketing strategy through efficient cost management, with increased sales stemming from demand for house repairs during the crisis.
Phase two will be a period in which the pandemic is controlled and subsiding, he said.
Telecommunications and property are potential gainers in this phase. Telecom is a tech-related sector that has become a part of people's livelihood on a daily basis, while property developers that focus on single detached houses will likely see demand from buyers who want to avoid living in high-rise condos and clustered units out of health concerns.
The final phase will be a period in which a vaccine for the coronavirus is successfully developed.
In this stage, tourism-related businesses will experience a boom as economic activities and spending via tourism resume, Mr Paradorn said.
Prapas Tonpibulsak, chief investment officer of Talis Asset Management, said newly listed securities related to technology that have launched IPOs on the Market for Alternative Investment are interesting, but their relatively small market capitalisation makes them difficult for mutual funds to invest in, as these securities have limited financial liquidity.