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Posted May 13, 2026 at 11:08 am
In this IBKR Podcast episode, Elizaveta Gridneva speaks with Andrew Stotz about whether Thailand is truly the “Sick Man of Asia” or a sleeping giant hiding in plain sight. Andrew breaks down the country’s macro pressures, market structure and valuation signals to explore whether Thailand is nearing a turning point for investors.
The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.
Welcome to our latest podcast episode. My name is Elizaveta Gridneva. I’m reporting from our Asia headquarters for Hong Kong. And today we’ll talk about Thailand with our very special guest. Andrew Stotz is a former number one rank analyst in Thailand with over 30 years of experience in equity research. He’s also a former CFA Society president and a true Thailand expert. Hi Andrew. Thank you for joining today.
Thanks so much for having me.
Let’s start right from the scandalous headlines. As we saw in the beginning of this year, recent reports in 2026, including analysis highlighted by the Financial Times labeled Thailand as “The Sick Man of Asia” due to its slowing economy and deep-seated structural issues. What do you have to say about it?
The sick man of Asia. I saw that title being repeated everywhere on the internet when that article came out. And I just got really annoyed because having lived here for more than three decades, there’s a lot of strengths. So I wrote a piece I called 14 Reasons Why Thailand is Not the Sick Man of Asia, and I highlighted some things. You know, personally, one thing that many business owners appreciate is that the central government is weak. If you look at the level of taxes and the level of controls over people, it’s very minimal in Thailand. And so that’s a strength. We’ve also got a pretty diversified economy, and we have one thing that’s very powerful many countries don’t have. We have food security. Almost every bit of this country you can grow food on. We have sun, we have warm weather, and we have water. There’s countries like, let’s take Egypt as an example. In the Ukraine crisis, they would have loved to have been food independent, but they’re not.
And you know, I saw many, many other things. For instance, we have a pretty robust banking sector. After the 97 crisis, a lot of improvements were made and they still maintain. We’ve got very, I would say pretty good infrastructure. In fact, I was just driving up into the north of Thailand, taking my mom on a trip, and not only are the trains and things like that great in Bangkok, but also if you go upcountry, the roadway systems are pretty impressive. And you know, so there’s a lot of things about Thailand. And I think my main thing is if you’re looking at Thailand for a super efficient place, well that’s China.
That’s great.
But Thailand has its benefits, and there’s a lot of them. So yes, I’m not ignoring the fact that there are many problems that Thailand’s facing. So I’m not ignoring that fact, but I’m saying there are many strengths here.
Great. Yeah, thank you for this integrated overview because you have been in Thailand for over 30 years. You know about the country. So we talked about some positives, but what do you think is holding Thailand back?
First thing is we have had a slowing population and a slowing labor force for many years. That’s number one. It is very hard to overcome that. Number two, we had an explosion of consumer debt or consumer credit that caused consumer debt to be very close to the level of GDP. And that basically moved spending forward many years ago. So we had strong growth, but when you combine these two factors, it’s very, very hard for Thailand to produce domestic growth above maybe 2%, something like that. And so that is probably the biggest challenge. Now there’s other challenges like education levels and things like that, but I would say that those are probably the two strongest challenges that companies are facing right now.
Understood. And I know that you did the research on Thai companies, so can you share a little bit about that and tell us why you think Thai companies struggle so hard?
One of the things that I did recently, and I like to write some academic style research, so I was just asking the question, what is the growth of the typical Thai company after IPO? And I looked at a minimum level of years of 10 years. So I said, okay, we have to have going basically up until 2015. And so we can look at any company that IPO’d around that time. And so I went back to 1995 and I calculated the growth. And the first thing you see is it’s not that different from the rest of the world. About average growth. And I’m going to talk about revenue because talking about profit is a little bit more volatile. So the average revenue growth is about 7%. But when you look at the outliers, there’s about 10% of the market that contribute a large part of that. Those are companies that really accelerated. The rest of the companies grow at about five to six percent. Now, I’ve done that same calculation globally, looking at about 5,000 companies across the world, and I’ve come up with about 6%.
So there’s not a big difference. But whenever I tell that number, particularly to business owners, and I talk to them about what do you think the average company grows at, people normally say 10%, 15%, but truthfully, if you can produce above 6% growth over a sustained period of time, let’s just say 10%, you’re going to do incredibly well over a long period of time.
Understood. So what do you think the main conclusion of that research that you performed?
Well, I think my conclusion to the companies at IPO, and when we look at those companies as an analyst, is how are you going to grow? And I don’t want to invest in a company that’s not growing. And the reason why I came up with this research is because I recently was contracted by the stock exchange to develop some research on companies in the Thai stock market that are not covered by financial analysts. And so I’ve been working in publishing this. And basically what I realize as you look at small micro cap companies is that the only thing that matters is growth. You know, if you’re a small company, you say, well, we have a high profitability. Well, it doesn’t matter. What matters is can you 10x this business? And so a lot of times what I’m doing is trying to help people think about how do I 10x this business? And if you have 10% growth, you can 10x the business in about seven years.
Great. Yeah. Growth is all that matters you’re saying. Understood. And let’s just shift to the bigger picture overall of the Thai market. What are some of the unique traits?
Sorry, I have to correct that. If you’re growing at 10%, you are doubling in seven years. Sorry. Okay. So you were saying the traits of the Thai market. Well, you know, one of the things about the Thai market is that we generally have a heavy representation of the energy sector, let’s say energy and materials. And these are government owned usually.
And so let’s say roughly 15% of the market cap of the Thai stock market is energy and materials, and 15% is bank sector. In fact, in 1993 when I became an analyst, I was a bank analyst and that was really the biggest sector at the time. Now it’s just 15%. And Thailand, we know, is a major oil importer. Major oil importer. What we can see is that when oil prices rise, the 15% that’s energy rises, because energy companies make more money generally on rising oil prices.
But we also see that the banks tend to underperform, and banks are basically supplying credit to the broader economy.
So you actually have this balancing out effect that prevents oil price from having a really, really strong impact on the market. So that’s something interesting that rising oil prices generally are going to benefit the stock market to some extent, but hurt the overall economy.
Got it. Great insight. And if we’re talking about Thai domestic investor profile, what are some of the typical traits?
Well, right now, the main feeling is exhausted. The Thai investor is just exhausted. We’ve been in a five year down cycle, and when I talk to investors, which I do quite often, basically the main story is, I bought this stock, it’s down 50%, what do I do now? And that’s pretty much the story of many retail investors, but in Thailand’s case, we’ve had a long down cycle. So I think you have an exhaustion in the retail market. I think that the institutional investors are also struggling, and we’ve had a proliferation of opportunities for Thai investors to invest outside of Thailand. Many years ago, there was no choice. Now there are choices and all of a sudden, Thailand’s getting even less attention from those exhausted people who are saying, maybe I’m gonna try to invest outside of Thailand. And so there has been a shift to that over the last, let’s say, three to five years.
Yes, actually, let’s talk about the future. The current outlook on Thailand—what are some market trends and how current state of global affairs will affect the economy you think?
What I said about Thailand’s growth in the population and what I said about Thailand’s consumer debt is nothing new. As I teach my students in valuation, this is in the price. For those people, if you’re out there and you are looking at Thailand and you think it’s so many negatives, well, that’s the whole point of investing. At what point is it in the price? Let’s just look at some multiples right now. If we look at the price to sales, price to sales globally is about 2.5 times, really supported by massive price to sales multiples in the US. In Thailand, it’s about 1.1 times. If we look at price to EBITDA, we’re looking at roughly 12 times globally and about six times in Thailand. And if we look at price to book, we’re looking at about three and a half times globally and about roughly two times in Thailand. So you can definitely say that Thailand is very cheap relative to the rest of the world. But that’s the easy part. The hard part is, okay, what happens next? So let’s look at profitability and growth because this is what matters, right?
Profitability of Thai companies, EBIT margins, net margins, ROEs, very low compared to regional peers as well as global. And the same thing with growth. Thailand is one of the only countries around the region that has had negative growth in profits. And so Thailand is struggling basically. And I would say we probably have another six to twelve months of working this out because one of the signals here is the PE ratio is not that cheap relative to the global average. And when that’s the case, it tells me that maybe earnings haven’t come down enough. So prices have come down, but they’re expecting that earnings are going to fall more. And when earnings fall more, what’s going to happen is that the market’s going to get cheap on a PE basis. So on most measures it’s cheap, but the question is, when can we see a turn in momentum? That’s the catalyst for the Thai market, and I would say there’s no clear signal at this point, and right now the government is trying to stimulate.
But there’s a very big problem with that. Thailand has one really great feature, and that is there is a law and regulation that the government can’t borrow more than 70% of GDP. In the past, it was 60% that was set aside for many years because Thai technocrats were very, very conservative. Rightly so. And then what happened is they raised it to 70%. And recently the government is saying, oh, we want to borrow more than that. So they’re trying to get that through right now. And to me, that’s bad news, not good news. Of course, if you’re government and people want government to solve your problem, but we know that government spending doesn’t really solve much.
The point is, is that if they pass that regulation, I think that you can put pressure on the currency then. Thailand is a floating currency that they can’t defend against what happens around the world. And so if the market takes it negatively, we could see weakness in the Thai Baht. And if we have weakness in the Thai Baht and weakness in the overall market, at some point there’s going to be an entry. And whether that’s three months or one year, it’s still up for grabs.
Thank you, Andrew, for this 360 view with numbers, with outlook. I think our listeners will really appreciate that insightful look into Thailand. I’m going to wrap it up now, but before I do, Andrew, actually I want to give you a chance to kind of draw a conclusion of our conversation today. If there is one takeaway you would like our listeners to have, what would it be?
The main point is at what point is the negative news in the price? And I think there’s nothing more important from my perspective about Thailand at this point. And I would say it’s getting close. But if I was sitting in New York or I was sitting in London, I was looking at Thailand, I didn’t have Thai exposure, the question I would be asking is, what point is this in the price? And I would say we’re getting close. Start looking at that. Maybe that’s a broad base, looking at an ETF or something like that. But think about when I’m comfortable with that in the next six to twelve months, let’s say, then I know how I’m in a position in that.
Great. Thank you, Andrew. So now our listeners have a few questions to think about. I appreciate your time. Thank you for joining me today.
Thank you very much.
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The eerie tinkling music that played in the background throughout the whole podcast was a bit weird and disturbing. For me, anyway, it meant that I couldn’t listen to the full podcast.