On Tuesday at 11:16 AM (Bangkok time), the share price of SCG Decor Public Company Limited (SET: SCGD) jumped by 6.12% or THB 0.30 to THB 5.20, with a trading value of THB 20.13 million.
Land and Houses Securities (LHS) pointed out that SCGD posted a solid net profit of THB 304 million for the third quarter of 2025, marking an increase of 37% quarter-on-quarter and 61% year-on-year.
Excluding special items—a THB 16 million flood compensation in the Philippines (compared to a loss of THB 60 million in 2Q25)—normalized profit exceeded market expectations and came in at THB 288 million, representing a 2% quarter-on-quarter increase and a 53% year-on-year rise.
The analyst noted that Thailand’s tile market was the only one to contract, declining 12% year-on-year due to sluggish real estate activity, while other markets continued to grow: Indonesia +9%, the Philippines +3%, and Vietnam +2%, each increase on an annual basis.
SCGD’s robust normalized profit was primarily driven by cost-cutting strategies, particularly a significant 11% year-on-year drop in selling, general, and administrative (SG&A) expenses following a structural realignment, and a 23% year-on-year reduction in interest expenses due to improved working capital management and lower market interest rates.
Total sales revenue reached THB 5.6 billion, marking a decrease of 2% quarter-on-quarter and 10% year-on-year, mainly attributable to an 11% year-on-year drop in Thai operations and the depreciation of the Vietnamese dong. In local currency terms, Vietnam sales grew by 4% year-on-year, reflecting improved market conditions and higher export volumes. Sanitary ware sales rose quarter-on-quarter, while sales in the Philippines and Indonesia increased by 1% and 33% quarter-on-quarter, respectively.
Gross profit margin (GPM) remained stable quarter-on-quarter but saw a significant year-on-year improvement on lower energy costs. SCGD’s ongoing cost-reduction drive includes biomass fuel usage and solar installation.
For the first nine months of 2025, normalized profit stood at THB 809 million, up 32% year-on-year and representing 82% of the full-year forecast (net profit at THB 744 million, 75% of annual estimates). This suggests potential upside for full-year earnings, as margins continue to beat expectations amid effective cost management.
Q4 is anticipated to remain strong, supported by seasonal strength and robust economic growth in Vietnam, though the Thai market is expected to contract year-on-year. Margins should improve further quarter-on-quarter due to cost-cutting initiatives, lower energy prices, and economies of scale. Notably, earnings during the period are projected to surge year-on-year from a low base.
LHS maintains a ‘Buy’ recommendation on SCGD, citing continued strong profit outlook and better-than-expected results in 3Q25. Despite market contraction, improved margins from cost-saving measures have supported earnings growth, while 2026 is expected to benefit further from Vietnam market expansion and new M&A activities.
