Thai firms see limited impact from Cambodia tensions, analysts urge close monitoring

UOB Kay Hian Securities views the current Thai-Cambodian tensions as a psychological factor rather than a fundamental risk. Thai listed companies with investments in Cambodia have not experienced significant disruptions to their operations. Krungsri Securities advises investors to monitor the situation closely.

Amid renewed tensions between Thailand and Cambodia, analysts suggest that companies listed on the Stock Exchange of Thailand (SET) with operations in Cambodia may face only short-term “psychological” impacts. Most businesses continue to operate and expand according to their original plans — a sign of long-term resilience.

Kitpon Praipaisarnkit, Executive Vice President at UOB Kay Hian Securities (Thailand), told Krungthep Turakij that such Thai-Cambodian disputes are not new and have flared up intermittently over the past two decades. These incidents rarely affect long-term trade or investment relations. Occasionally, nationalist sentiments may lead to temporary boycotts of Thai products, but these are usually short-lived.

He emphasized that any effect on Thai firms investing in Cambodia is psychological in nature. There may be a short-term dip in sales and service revenues, but no significant change to business fundamentals has occurred.

One example is Carabao Group Plc (CBG), which plans to establish a manufacturing plant in Cambodia. This move aligns with broader regional strategies — such as setting up energy drink factories in Myanmar, like OSP and CBG — to lower production costs compared to exporting finished goods. The strategy offers price competitiveness.

Thai goods and services are generally seen as premium in regional markets, with strong consumer acceptance. Therefore, any sales slowdown is expected to be short-term and unlikely to derail expansion or factory construction plans.

Kornpat Worachet, Executive Vice President and Head of Research at Krungsri Securities, added that while the Thai-Cambodian issue may weigh on investor sentiment regarding stocks with Cambodian exposure, there’s been no material disruption to actual business operations. Still, geopolitical developments should be closely monitored.

He noted that the broader effects are still difficult to quantify, given that real economic impacts have not yet materialized. For now, markets are pricing in the risk on a psychological level. Investors should watch closely for signs of increased geopolitical risk or any policy changes by the Cambodian government that could affect business operations.

Asia Plus Securities assessed the situation and listed industry-specific exposures:

• Beverages: CBG may face negative impacts.
• Healthcare: Hospitals are expected to be unaffected.
• Power Generation: Most firms studied have no Cambodian presence, except BGRIM, which operates a solar power plant.
• Energy: OR has a presence.
• Retail: Minimal impact; CPALL, CPAXT, and BJC have branches in Cambodia.
• Media: MAJOR runs six cinemas.
• Construction Materials: Cambodia is a key border trade market for Thai cement companies like SCCC and SCC.
• Agri-Food: CPF has investments in Cambodia.

Despite current tensions, analysts agree: the fundamentals of Thai companies with Cambodian interests remain intact.