Krungsri Securities (KSS) notes in its report, expressing a positive sentiment toward The Siam Cement Group (SCC) after its CEO recently shared with Bloomberg the prospect of a potential production restart at its Long Son Petrochemicals (LSP) plant in Vietnam.
While this possibility had previously been raised in the previous analyst meeting, KSS sees several key takeaways from the latest developments.
First, the statement from the CEO comes at a time when high-density polyethylene (HDPE) spreads have pulled back to the $360-370 per ton range, reflecting a market environment that still supports considering a production restart.
Second, the estimated cost to ramp up the plant’s operations sits around $10 million. Should SCC’s management decide to bring LSP back online, the analyst expects this would indicate a more sustained production resumption, rather than a temporary opening.
Third, a number of market participants have yet to fully price in the impact of LSP’s potential restart, suggesting there could be upward adjustments to forecasts once operations resume.
KSS has already factored a 2H25 restart of the LSP facility into their projections. The return to production is expected to gradually reduce SCC’s fixed costs, which currently burden the company at roughly 3 billion baht per quarter.
The analyst reiterates a ‘Neutral’ stance on SCC with a 2025 target price of 175 baht per share, and maintains that a key buying signal would be if HDPE spreads steadily sustain above $400 per ton.
Meanwhile, for every faster-than-expected $10-per-ton recovery in either the polyethylene (PE) or polypropylene (PP) spread, SCC’s 2025 earnings estimates could see an upside of approximately 436 million baht, or about 3%.
The current forecasts for HDPE spreads for 2025 and 2026 by the analyst stand at $400 and $455 per ton, respectively, versus a year-to-date average of $341 per ton (PP: $390 and $450 vs. YTD $379 per ton).
