Kiatnakin Phatra Securities (KKPS) anticipates a cyclical recovery in Thailand’s retail sector for 2026, with the general election serving as a likely near-term catalyst.
The analyst expects that several headwinds seen in 2025—such as earthquake impacts, La Nina weather conditions, and government dissolution—will subside, potentially driving a turnaround in same-store sales (SSS) and net profit after tax (NPAT) for the sector.
The upcoming election is viewed as particularly beneficial for companies with significant exposure to upcountry markets, naming Central Pattana (CPN) as its top pick for resilient operations, attractive valuation, and possible dividend yield upside.
Earnings estimates for major retailers CP All (CPALL), Central Retail Corporation (CRC), CP Axtra (CPAXT), and Home Product Center (HMPRO) for 2026-2027 have been revised downward by 0-5% to reflect the absence of near-term government stimulus measures after the dissolution. Nonetheless, the brokerage firm projects the sector NPAT will rebound from a decline of 3% in 2025 to a growth of 9% (reaching THB 80 billion) in 2026, as temporary headwinds ease.
Price targets for these companies have been reduced by 3-15%, with the sharpest cut for CPALL due to a lower target price-to-earnings ratio, in line with sector peers. Valuation still appears reasonable, with the sector’s price-to-book value at -2SD versus a return on equity of -1SD, suggesting limited downside risk.
Gradual improvement in consumption is expected, with sector same-store sales growth (SSSG) forecast to rise from -2.1% in 2025 to +1.6% in 2026. However, this rate is below the historical sector average (during 2011-2024, excluding the pandemic period of 2020-2021) of 2.1%, reflecting continued weakness in Thailand’s consumption fundamentals, which could weigh on discretionary spending.
Discretionary SSSG is projected at +1.7%, below its historical average of +2.9%, while consumer staples SSSG is expected to match its historical trend at 1.6%.
The dissolution of Thailand’s House of Representatives on 12 December 2025 and the scheduled general election for 8 February 2026 are seen as drivers for an ‘election rally’ in the retail sector, echoing performance seen before the 2023 elections.
During the run-up to the last election, all major retailers outperformed the market in the month leading to election day, with notable gains among upcountry-focused names such as CPALL and GLOBAL.
As a result, KKPS gives ‘Buy’ ratings on CPALL, CPN, CRC, and GLOBAL, with target prices of THB 52.70, THB 64.67, THB 21.60, and THB 7.08, respectively, while recommending ‘Neutral’ on CPAXT and HMPRO, with target prices of THB 18.48 and THB 7.58.
