Thai companies investing in the US are expected to reap benefits from the imminent US tax overhaul in terms of lower tax liability and better corporate earnings, analysts say.
Indorama Ventures Plc (IVL), a maker of intermediate petrochemicals, should see the biggest gain among Thai firms investing in the US, as a large portion of the company's revenue comes from US operations, said Teerada Charnyingyong, vice-president of Phillip Securities Thailand.
Charoen Pokphand Foods Plc (CPF) and Thai Union Group Plc (TU) will see lesser benefit because a lower portion of their revenue stems from US operations, Ms Teerada said.
"The tax cuts are a positive sentiment for global stock markets, including the Thai bourse, but fund outflows [in the Thai stock market] are anticipated because these companies will use greater revenue to invest abroad," she said.
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The Senate has approved the most sweeping overhaul of the US tax system in more than three decades. Once reconciled with the House version, the finished bill could go to President Donald Trump's desk for his signature this week.
Corporate taxes will be capped at 21% instead of the current rate, which varies from 15% to 35%.
The Republicans, who control both houses of the US Congress, say the tax cuts for corporations, small businesses and individuals will boost economic growth.
Wijit Arayapisit, vice-president of Maybank Kim Eng Securities Thailand, said the tax bill is likely to be enacted before Christmas Day, as the Trump administration wants a clear-cut political achievement before year-end.
Aside from tax benefits, IVL's upward-trending earnings are a boon to the company's outlook, Mr Wijit said.
TU needs watching because of high tuna prices, he said, while CPF remains saddled with high operating costs.
"The stock market has speculated about and priced in this [tax cut measure] for some time, so the market is not surprised by this development," Mr Wijit said.
In April, Asia Plus Securities (ASP) said in a research note that IVL, CPF and TU were poised to reap a windfall from Mr Trump's planned tax cuts.
Taking the broad-based US tax reform plan into account, the broker raised its net profit forecast for TU by 2.8% to 7.08 billion for 2017.
TU owns US brand Chicken of the Sea and has engaged in shrimp trading and animal feed businesses in the world's largest economy through subsidiaries.
"The individual tax cut policy will also indirectly benefit TU, as consumers will have more purchasing power and Red Lobster restaurant is 20% held by TU," the note said.
CPF is expected to take advantage of Mr Trump's tax overhaul, but on a smaller scale than TU, ASP said. The broker raised its net profit forecast for CPF by 0.3% for both this year and next to 13.9 billion baht and 16 billion, respectively.
ASP raised its net profit forecasts for IVL by 6.4% to 12 billion baht in 2017 and 8.3% to 15.4 billion in 2018, as the company's plants in the US will enjoy a lower tax bill.
Banpu Plc, Thailand's largest coal miner and trader, operates shale gas business in the US and will benefit from the corporate tax cut in the long run.
Banpu chief executive Somruedee Chaimonkol said the tax cut will increase total net income in the shale gas business, but it is too early to put an exact figure on the company's tax benefit.
Ms Somruedee said total net income from business in the US is expected to continue rising and make the country attractive for future investment.
Banpu began diversifying business to hedge against risk in March 2016, when the company started acquiring stakes in the Marcellus Shale, a source of natural gas in the state of Pennsylvania.
With a total investment of US$522 million (17.1 billion baht), Banpu runs six gas blocks in the US with a combined gas production of 201 million cubic feet per day.
Tritecha Tangmatitham, managing director of SET-listed developer Supalai Plc, said tax incentives in the US make property investment there attractive, but location is key.
"More attractive [than the tax incentives] is timing of investment," he said. "The property market in the US is very volatile. The incentives could accelerate the decision of those who plan to invest but may not draw new investors."
Oranan Paweewun and Kanana Katharangsiporn