On Wednesday at 11:19 AM (Bangkok time), the share price of CH. Karnchang Public Company Limited (SET: CK) surged by 4.20% or THB 0.60 to THB 14.90, with a trading value of THB 16.34 million.
Phillip Securities (Thailand) anticipates a robust third-quarter net profit for CK, projecting earnings at THB 1.39 billion. The brokerage firm cites year-on-year and quarter-on-quarter growth, driven by the high season for its investments in BEM and CKP, as well as an estimated special gain of THB 700-800 million from the sale of its stake in the Luang Prabang Power project.
Meanwhile, construction revenues are seen continuing their upward trajectory on the back of project progress, with gross profit margins (GPM) from construction activities stable at 7.3%. Phillip Securities maintains its ‘Buy’ rating on CK, with a base price of THB 18.50 per share.
DAOL Securities (Thailand) provides a more conservative view, estimating CK’s normalized profit for the third quarter—excluding the special gain—at THB 890 million, a 12% drop year-on-year but a 3% increase quarter-on-quarter, in line with preliminary estimations.
The key drivers are a rise in revenue (+16% year-on-year, +2% quarter-on-quarter) from ongoing large projects with steady progress, and an improvement in GPM by 90 basis points year-on-year due to a favorable project mix. Notably, there has yet to be any impact from recent road subsidence incidents in Bangkok.
Share of profit from affiliates slowed by 31% year-on-year, as CKP and Luang Prabang Power posted foreign exchange gains in 3Q24. However, the figures grew 25% quarter-on-quarter, supported by CKP’s high season.
DAOL Securities maintains a net profit forecast for 2025 at THB 2 billion (+38% year-on-year), with potential for an upward revision to reflect the special gain from the Luang Prabang Power stake sale. The one-off post-tax profit from the transaction is estimated at approximately THB 600 million.
For the fourth quarter, CK’s operating outlook is expected to improve on a yearly basis, supported by higher construction income, though it may soften from the previous quarter given the absence of dividend income and a seasonal slowdown at CKP.
As a result, the analyst maintains a ‘Buy’ rating on CK, raising its target price to THB 23.50 per share based on an SOTP valuation. While the recent road collapse in Bangkok remains a concern, repairs are proceeding according to plan, and the company is confident that insurance claims will be honored.
The recent correction in CK’s stock price is viewed as already reflecting market worries. Looking ahead, continued profit expansion in 2025-2026 is anticipated, backed by a growing backlog and potential catalysts such as the THB 35 billion Double Deck project, which could see clarifications later this year.
