Even though the chief executives of top Thai companies expect the country's 2020 economy to continue to be stuck in the slow lane, they are optimistic that the growth pace will improve from last year, albeit at a muted canter.
Most of them remain cautious amid dynamic risks, concerned about the global and Thai economies because of the lingering trade spat between the world's two biggest economies and ongoing digital disruption.
Apart from macroeconomic risk, each business sector faces individual challenges. Take the banking sector as an example: tech giants continue to disrupt banks, while tougher regulations and a new accounting standard are posing more hurdles to clear.
Most CEOs are prioritising agility and technology adoption in preparation for a whirlwind of uncertainties.
Mr Banthoon laments how the rules of the game have changed.
Banking
Banthoon Lamsam, Kasikornbank's chief executive, paints a bleak outlook for Thailand's economy and banking industry in 2020.
"Given the likelihood of low growth everywhere, including Thailand, there is no growth story to sell to potential investors," he said at a recent analyst meeting. "Banks' ability to make a profit is weaker than 20 years ago. Things are getting tougher, such as making loans and gaining fee income -- the sorts of things we've enjoyed over the past couple of decades."
KBank predicts the Thai economy to expand by 2.7% this year, up from 2.5% projected for 2019. Both years' growth, if the forecasts hold, are below growth potential of 3.5-4%.
"It's not a rate that will make people prosperous," Mr Banthoon said.
Amid low economic growth it's difficult to lend, while asset quality and market conduct required by the central bank are leading banks to be more cautious.
Non-interest income growth is shrinking, and financial institutions have struggled to find replacements in recent years. Net fee and non-interest income used to be big items in the income pile but have dwindled every year, Mr Banthoon said.
KBank's credit cost is expected to reach 150 basis points in 2020, assuming nothing bad happens on the asset-quality side.
"We may wave goodbye to a double-digit return on equity for a while unless we find something better and more intelligent," Mr Banthoon said. "Unlike 20 years ago, having a banking licence today is not that valuable anymore. The banking industry used to be a near monopoly, but the new paradigm is using technology to deliver banking services."
Talent is critical in running a bank, he said, and large institutions cannot count on attracting top talent anymore, especially those with digital savvy.
Seeking ways to ensure that financial institutions will survive is a tough task.
"Capital so far looks more than adequate," Mr Banthoon said. "Given the stricter regulations coming down the road, the next generation of Basel and TFRS 9 rules may mean we have just enough to get by. We always want to be on the conservative side. We never want to be in a position where we're undercapitalised like 20 years ago."
Last October, KBank launched a series of 2020 financial targets. The country's second-largest lender by assets targeted non-interest income contracting by 5-17% in 2020, compared with a 5-7% shrinkage in 2019. The bank aims for a net interest margin of 3.1-3.3% this year, down from 3.3-3.5% in 2019. The cost-to-income ratio target is set at mid-40% in 2020, compared with low- to mid-40% last year.
The bank set a target for gross non-performing loans of 3.6-4% of loans outstanding this year, compared with 3.3-3.7% for 2019. Its target for loan growth is 4-6% for 2020, compared with 5-7% growth last year.
Mr Aswin says Big C remains committed to investing in the retail sector.
Retail
Aswin Techajareonvikul, chief executive of Big C Supercenter Plc, the operator of Big C hypermarkets, said that although Thailand's GDP is below that of many regional peers like Vietnam, Laos and Cambodia, the group remains confident in the economy's long-term ability to recover to healthy growth and become a leader again.
He urged the government to continue introducing more measures to spur the economy, particularly those that lead to immediate shopping.
Despite lingering concerns about overall consumer confidence, Mr Aswin feels upbeat about Thailand's retail market in 2020, boosted particularly by the 2020 Tokyo Olympics.
Regardless of the country's economic conditions, the company is committed to investing here to promote confidence in the retail sector, which is a key contributor to GDP.
But Mr Aswin said more caution in investment and greater financial discipline are needed to mitigate business risk.
Big C is expanding via small retail outlets (Mini Big C) to better reach customers in Bangkok and major cities nationwide, as well as investing in IT facilities and big data to better understand consumer lifestyles and varying needs.
The company will gear towards the online channel because it has fared quite well and offers great opportunity for expansion, Mr Aswin said.
Big C is less concerned about fewer tourists, particularly Chinese customers, as it believes the situation will improve in the future.
"We have to adjust our strategy to focus more on India and the Middle East, altering our product assortment to meet their demand," Mr Aswin said.
Mr Preecha says CPN is girded for the long term.
CENTRAL PATTANA
Preecha Ekkunagul, chief executive of Central Pattana Plc, the SET-listed property and retail developer under Central Group, said economic prospects for 2020 are stronger than in 2019 because there are no additional negative risks this year.
He said the country faced many negative factors in 2019, particularly the prolonged trade row between the US and China. Mr Preecha is somewhat optimistic that both giant economies will look for trade compromises in 2020.
He added that the Thai government will continue launching more economic stimulus measures to sustain growth momentum while the global economy remains in the doldrums.
Long-term government measures to support private investment are also expected, Mr Preecha said.
He said Central Pattana will continue its expansion plans in 2020 regardless of the economic situation: "We are investing for the long term, so we won't shiver based on one year of results."
He acknowledged that technology remains a challenge and that the company needs to adapt its business model to keep abreast of changing consumer behaviour.
Central Pattana needs new approaches such as strategic partnerships with local and foreign companies to enhance its businesses in the year to come, Mr Preecha said.
He predicts a tourism rebound in 2020, as arrivals started to recover in the final quarter of 2019.
Shopping outlays among tourists have remained unchanged, largely because of the strong baht, Mr Preecha said.
"In light of the baht's strength, we need to adjust our merchandise and services to suit their demand," he said.
Mrs Supattra insists developers must be agile to adjust to a volatile market.
Property
Supattra Paopiamsap, chief executive of residential developer Pruksa Real Estate Plc, said the best the property market can hope for in 2020 is flat growth. The market slowdown could continue as many volatile factors remain.
"Several negative factors are still present this year. The main one is negative sentiment," she said. "In reality, the situation is unlikely to be as bad as people imagine, but they are not confident."
Instead of talking about problems or poor sentiment, everyone -- the public, companies and lenders -- should have a positive mood to help improve consumer confidence, while developers should embrace change, Mrs Supattra said.
"Housing demand remains, but homebuyers are not confident about spending," she said. "Pruksa aims to outperform the market."
Mrs Supattra suggested developers launch only projects in which they are confident of demand, while products should match buyers' needs. Developers should be more cautious in the number of their projects this year.
"Plan for the best, prepare for the worst, as we don't know what will happen," she said. "Developers should have agility to adjust quickly in a volatile market. They should have a Plan B."
Mrs Supattra said brand and innovation are significant: in a crisis, a company with a strong brand can manage better than those without, as consumers will not take a risk by buying a house from an unfamiliar brand.
Developers should always have new innovations to create a sales incentive. This strategy can boost sales in both strong and slow markets, said Mrs Supattra, a former chief executive of Unilever Thai Trading Ltd.
"Cutting prices can work temporarily as a tactical strategy," she said. "If used all the time, it hurts the brand image, making it difficult to recover."
Developers, particularly smaller firms, should have good cash flow and liquidity management. They should embrace cost efficiency and apply zero-based budgeting, Mrs Supattra said.
"Instead of budgeting by comparing with the year before, we should ask ourselves whether that item requires the spending and how efficiently it could be invested," she said.
A key to organisational success is the quality of human resources. A company should seek employees and change leaders, then transform them by adding new skills or reskilling them in this age of disruption, Mrs Supattra said.
Mr Chairat says the strong baht remains a challenge.
Tourism
The number of international tourist arrivals in 2020 is expected to grow by 5-7% regardless of external factors, said Chairat Trirattanajarasporn, president of the Tourism Council of Thailand.
To reach this target, the industry must find effective solutions to maintain positive momentum and support the overall economy. One is attracting quality tourists who spend more while travelling, Mr Chairat said.
He views the strong baht as the main challenge for Thai tourism in 2020, as tourists remain concerned about prices amid a slow global economy and the baht's surge ensures that travel here is more expensive.
To stay competitive in a crowded market, he suggests operators prepare for rapid changes and improve their services, especially in terms of safety and providing standard products at reasonable prices.
"Tourists seek experiential tourism in new secondary cities rather than overcrowded destinations," Mr Chairat said. "We need to capitalise on this trend and improve transport infrastructure in second-tier provinces for better connectivity."
Moreover, promoting community-based tourism products from secondary provinces at international roadshows will build recognition among foreigners, he said.
In 2020, short-haul markets like India will continue to play a vital role for Thai tourism.
Arrivals from India gained pace in recent years. Mr Chairat said operators should focus on niche segments from this market, such as families, meetings, incentives, conventions and exhibitions, as well as weddings and honeymoons.
Tourists from neighbouring countries are another promising market, thanks to easy border crossing and convenient transport. They typically enjoy travelling and shopping in Thailand, Mr Chairat said.
He believes Thailand is still a preferred destination for foreigners because of its variety of tourism products, rich natural resources and local hospitality.
Tourist arrivals in the first 10 months of 2019 grew moderately, rising 4.3% year-on-year to 32.1 million, while contributing 1.57 trillion baht in tourism income, up nearly 4%.
The council downgraded its forecast for this year to 39.7 million arrivals with 1.95 trillion baht in revenue, falling from 40.1 million arrivals contributing 2.13 trillion baht.
Mr Somchai says 5G adoption can help shore up the economy.
Telecom
Despite the likelihood of slow growth in 2020, Somchai Lertsutiwong, chief executive of the country's biggest mobile operator, Advanced Info Service (AIS), says 5G tech adoption and megaprojects can play a part in helping to shore up the domestic economy.
Promising megaprojects include the Eastern Economic Corridor scheme and the upgrade of U-tapao airport in Rayong, he said.
Mr Somchai made clear that the government, through related agencies, needs to handle the projects properly to accommodate business investment for private operators.
5G adoption cannot be driven by mobile operators alone -- it requires support from those in vertical industries to invest in innovation and explore business opportunities, he said.
Mr Somchai said AIS this year will focus on forming partnerships with others in a variety of businesses, creating digital platforms supported by data analytics and cloud tech, as well as fostering sustainable development for the environment and society.
He said 2020 will be a year when big corporations must emphasise creating environmental and social benefits as part of sustainable development. This shift will improve the standing of companies in the eyes of consumers.
"Retaining only an economic focus is no longer sufficient for corporations," Mr Somchai said.
AIS has initiated several social responsibility projects. One of them is Aunjai Cyber for Thai Children, aimed at raising digital knowledge among kids. An online content system was also developed to filter inappropriate content through a collaboration with Google.
From 2020, AIS plans to work with various industrial sectors to formulate certain digital platforms to accommodate people, Mr Somchai said.
Some 85% of the company's revenue is from mobile business, 10% from enterprise business and the rest from fixed broadband service.
In the next three years, revenue from mobile service is expected to fall to 70% of the total, with the rest from fibre, enterprise business and new businesses.
Mr Chansin says non-Opec members are expected to increase production.
Energy
Chansin Treenuchagron, president and chief executive of PTT Plc, said economic uncertainties in 2020 will be largely due to external factors, such as continued trade tensions between the US and China, the conflict between Japan and South Korea, the Brexit endgame and instability in Hong Kong.
"Those risks will affect other countries and pressure the global economy," he said. "But it is possible some conflicts will ease, improving the situation."
Mr Chansin noted that global economic indicators have slowed in the past few years. In 2019, industrial production and global trade volume recorded the slowest growth in 10 years, he said. Global GDP growth was 3% last year, compared with 3.6% in 2018 and 3.8% in 2017.
Larger economies such as the US, China, Europe and India also suffer from myriad risks, Mr Chansin said.
"But uncertainties should ease in 2020 for both developed and emerging countries," he said. "PTT forecasts the global economy to grow by 3-4% in 2020, a similar pace to 2019 and 2018."
For the global oil sector, PTT estimates the average Dubai crude oil price in a range of US$55-$65 a barrel in 2020, with global demand for crude of 1 million-1.3 million barrels per day.
The supply of crude oil is projected at 1.7 million barrels a day, resulting in a slight surplus in the global market.
Factors to be closely monitored include the increased oil production capacity of non-Opec nations and Opec policies governing production.
Opec nations are set to maintain oil production levels in 2020, Mr Chansin said, while non-Opec members are expected to increase oil production to 2.2 million barrels per day.
Mr Pitak says debt will hamper loans.
Automotive
Pitak Pruittisarikorn, chief operating officer of Honda Automobile Thailand, said the local car market in 2020 is hard to predict because there are myriad risks that could lead to declining car sales, a situation similar to 2019.
The 2018 market grew by 19.5% with 1.04 million cars sold.
"Many car distributors did not expect the 2018 market to exceed 1 million units sold, but the market made it," Mr Pitak said.
This was a continuation from 2017, when sales totalled 871,650 units, up 13.4%.
For 2019, sales rose in the first five months, then began a backslide from June to November.
"The country's economic sentiment was quite unfavourable in 2019," Mr Pitak said. "Although car sales grew the first five months, inevitably they had to fall in line with the economy.
"All economic indicators reflected a downturn, such as global and Thai GDP figures, consumer confidence, investment, exports and currency appreciation."
The final month of 2019 could help sales equal 2018's, but momentum is not healthy, Mr Pitak said.
"Whether the 2020 market will bottom out, it is hard to determine," he said.
The high-end car segment in 2020 will remain in neutral, while the subcompact sector will decline as the overall market suffers from loan rejections from banks, Mr Pitak said.
The high level of household debt is a key concern for financial institutions, and the strong baht is on the mind of every company -- Honda no exception. Its manufacturing facilities in Ayutthaya and Prachin Buri are part of a large hub for the group's markets in Asia and Oceania.
"We know that government agencies are monitoring this problem, but it requires urgent measures and solutions," Mr Pitak said. "Not only are car exporters suffering, but also other shipment-related companies."
He said the strong local currency is limiting Thailand's trade competitiveness.