สำนักข่าวหุ้นอินไซด์(9 เมษายน 2569)-------Fitch Ratings (Thailand) Limited has affirmed CGS International Securities (Thailand) Co., Ltd.'s (CGS TH) National Long-Term Rating at 'A+(tha)' and National Short-Term Rating at 'F1+(tha)'. The Outlook is Stable.

Key Rating Drivers
Shareholder Support Drives Ratings: CGS TH's ratings reflect Fitch's view that it is a strategically important subsidiary of Singapore-based CGS International Securities Pte. Ltd. (CGSI, BBB-/Stable) and that the parent would provide extraordinary support if needed. The ratings also take into account CGS TH's support-driven credit profile relative to other entities in the Thai national rating universe.

Support Ultimately from Chinese Group: CGSI's ability to support CGS TH is reflected in CGSI's credit profile, which is underpinned by expected support from its ultimate parent, China Galaxy Securities Co., Ltd. (CGS, BBB+/Stable), a leading Chinese securities firm that is controlled by a Chinese state-owned entity, Central Huijin Investment Co., Ltd. CGSI is an intermediate holding company that controls the group's securities subsidiaries in south-east Asia.

For further details on CGS and CGSI's key rating drivers and rating sensitivities, refer to "Fitch Affirms Ratings of China Galaxy Securities and Subsidiaries; Outlook Stable", dated 30 June 2025.

Synergistic Role in the Group: CGS TH supports the group's presence and expansion in south-east Asia, facilitating investment flows between Thailand and CGS's clients in China and the rest of the Asia-Pacific. It has synergies with CGSI through investment-banking co-operation and business referrals. However, we do not classify CGS TH as a core subsidiary due to its localised operations and modest profit contribution to the group. CGS TH's profitability has been weak in recent years amid soft Thai equity market conditions, but its revenue contribution to CGSI has remained meaningful at about 11%.

Strategic Alignment: CGSI controls CGS TH through board representation, influencing its strategy and operating approach. CGS TH's plans to diversify earnings into margin lending and investment banking, alongside cost-control efforts to offset industry margin compression, align with the group's direction and benefit from parent support. CGS TH also leverages the group's regional network and technical capabilities to broaden its local product offerings and support revenue diversification.

High Integration and Reputational Linkages: CGSI holds nearly full ownership of CGS TH and exerts clear control and oversight of the subsidiary's management and risk framework. The two entities share the same brand and have strong ongoing linkages, including group audits and shared infrastructure for core operating and technical systems. We believe a default at CGS TH is likely to harm CGSI's broader regional reputation.

Headwinds Remain for Securities Firms: We expect near-term earnings upside for Thai securities firms to remain limited, with the securities market likely to stay volatile. Thai securities firms have been pressured by weak stock-market sentiment over the past several years. Equity market trading volume declined by 12% in both 2025 and 2024, and IPO activity has been muted. This has been reflected in weak financial performance at CGS TH, with operating losses in 1H25 and 2024.

Parent Support Underpins Funding: CGS TH's balance sheet benefits from ongoing ordinary support. Recent losses have been modest compared with equity and the funding profile remains generally steady, due in part to capital injections and subordinated debt from CGSI, demonstrating the parent's ongoing commitment and capacity to back future business expansion.

RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
A weakening in CGSI's ability to provide support, as indicated by a downgrade of its Long-Term Issuer Default Rating (IDR), could lead to negative rating action on CGS TH.

CGS TH's ratings could also come under pressure if the parent's propensity to support the company declines, such as if CGSI reduces its shareholding to below 75% alongside a loosening in management oversight, weaker operating and strategic links, or reduced intra-group business and funding synergies. Persistent poor performance could also weaken CGSI's propensity to support its subsidiary, but we believe recent profitability challenges due to weak market conditions would not diminish the parent's willingness to support CGS TH in the near term. Any rating action would also take account of CGS TH's credit profile relative to other entities on our Thai national rating scale.

CGS TH's National Short-Term Rating would be downgraded to 'F1(tha)' if the National Long-Term Rating were to be downgraded to 'A-(tha)' or below.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
CGS TH's National Long-Term Rating may be upgraded if CGSI's Long-Term IDR is upgraded, indicating a stronger ability to support the subsidiary. Any positive rating action would also take into account relativities within the Thai national rating universe. The rating could also be upgraded if Fitch views the parent's propensity to support CGS TH as having strengthened, for example through deeper operational support and integration, or increased business referrals that improve revenue diversification and profitability at the subsidiary.

There is no upside to the National Short-Term Rating, as it is at the top end of the scale.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings
CGS TH's ratings are linked to CGSI's Long-Term IDR.