Maybank Investment Bank has a positive view on Thailand’s tech-service companies thanks to 38 percent FY25 estimated core profit growth for the sector, as compared to a 6 percent decline in FY24.

The research house said in its recent report that the turnaround from profit decline in FY24 to profit growth in FY25 should come from virtual banking projects and the government’s rising information technology (IT) investment.

It is noted that the Bank of Thailand plans to issue three virtual banking licenses in mid-2025 and require the recipients to start operating by mid-2026.

“We estimate THB3 billion ($87.57 million) to THB 5.7 billion ($166.37 million) capital expenditure (capex) by the virtual banks before they can start operating in mid-2026,” it said.

According to Maybank, the increase in the government’s IT investment in 2025 should stem from project delays from 2024 and higher capex budget for the government’s fiscal year 2025 (starting in October 2024).

Maybank also maintained an overall neutral view on Thailand’s electronics sector heading into 2025.

“We believe the automotive and industrial segments will continue to struggle while the artificial intelligence (AI)/data center market looks to regain its growth momentum with the release of Nvidia’s Blackwell chips,” it said.

In particular, it noted the demand for data center looks quite robust, with Bloomberg forecasting the storage market (hard disk drives [HDDs] and solid-state drives [SSDs], for use in data centers) to continue growing to $211 billion (+12.6 percent year on year) in FY25, up from $187 billion (+12.2 percent year on year) in FY24.

Additionally, Maybank highlighted the trade war theme seems to be an important consideration in 2025 with the election of Donald Trump, who will look to try and strengthen the US’s position in the semiconductor/electronics industry against China.

It opined that with Trump, countries that contribute highly to US trade deficits are at risk of facing increased tariffs – namely China, Vietnam, and Mexico (top three US trade deficit contributors in the first nine months of 2024).

However, it opined that manufacturers with factories in geopolitically neutral countries, such as Thailand, will stand to benefit.

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