KGI Securities noted that Com7 Public Company Limited (SET: COM7) recorded a double-digit year-on-year revenue growth in April and May, driven by an uptick in gross margins. Meanwhile, despite this strong start to the second quarter, persistently weak economic conditions could pose significant challenges for the company to maintain momentum through the rest of the year.
The analyst pointed out Thailand’s Consumer Confidence Index (CCI) which exhibited a downward trend for the fourth straight month in May, hitting a 27-month low at 54.2. In response, retailers, including COM7, have been resorting to aggressive price promotions, especially in the lead-up to new smartphone launches.
Data suggest the average price of iPhone 16s has been discounted by around 9% from its opening price, with additional discounts available via COM7’s website – making the company among the most price-competitive in the market.
While such strategies may support sales volumes, they are likely to put pressure on overall profitability. As a result, KGI anticipated COM7’s second-quarter earnings to dip quarter-on-quarter, albeit with moderate year-on-year growth, partly reflecting seasonal factors.
Looking into the second half of 2025, prospects appear restrained despite the period normally marking the high season with major new launches from Apple and other brands.
A subdued economic outlook, extended by expectations from KGI economists of slower GDP and consumption growth in the second half versus the first, as well as uncertainty stemming from domestic political factors, are key headwinds.
Furthermore, Apple’s recent product announcements have matched market expectations without delivering material surprises, reducing potential tailwinds for COM7.
The company expects minimal effects from tariffs in the near term, but remains alert to potential longer-term challenges. These could include higher retail prices if Apple reinstates its global pricing policy, as well as increased competition if Apple allocates more product supply to markets outside the United States.
Reflecting these challenges, the analyst revised down earnings forecasts for COM7 in 2025 and 2026 by 3-5%, with expectations of lower gross margins due to possible promotional campaigns aimed at boosting sales.
Following these developments, KGI Securities maintained a ‘Neutral’ rating on COM7, with a target price for end-2025 at THB 19.80 per share.
As of 10:40 AM (Bangkok time) on Thursday, the share price of COM7 rose by 1.10% or THB 0.20 to THB 18.30, with a trading value of THB 26.08 million.
