Kasikorn Securities (KS) noted that KCE Electronics Public Company Limited (SET: KCE) has set its sights on a 5% revenue increase for 2026, buoyed by stronger demand for HDI products and a broader industry recovery.
Management expects the company’s fourth-quarter performance to remain steady, though sales may dip slightly due to a scheduled five-day plant closure at year-end. Nevertheless, KCE anticipates gross margins to remain resilient in the 21-22% range.
KS highlighted that net profit should improve from the third quarter, which had been negatively impacted by extraordinary expenses.
KCE is currently prioritizing cost-reduction efforts, having achieved about half of its targeted savings. If the remaining cost-cutting initiatives are realized by mid-2026, KCE believes it could enhance its margin by approximately 3.5%.
However, management cautioned that administrative expenses may rise in the near term, as ongoing production process improvements and machinery upgrades could require some asset impairment charges. Workforce reductions are also being pursued, with plans to decrease headcount by another 5-10%—from 3,800 to approximately 3,500 employees.
For 2026, KCE has allocated a capital expenditure budget of THB 600 million, a level management deems sufficient to support robust dividend payouts, given the absence of major new investment plans.
Overall, Kasikorn expects KCE’s margin to outperform both its own and market expectations, while sales forecasts remain in line with prior estimates, and operating expenses might be marginally higher. The brokerage firm maintained a ‘Buy’ recommendation on KCE with a target price of THB 27 per share.
