KGI Securities (Thailand) forecasted in the research note that Home Product Center Public Company Limited (SET: HMPRO) will report a net profit of THB 1.5 billion for the fourth quarter of 2025, reflecting a year-on-year decline of 13%, but a sequential increase of 16% from the previous quarter.
According to the brokerage, the YoY decrease is primarily attributed to subdued consumer demand resulting from unfavorable economic conditions and negative same-store sales (SSS). In contrast, the quarter-on-quarter growth is largely driven by seasonal effects, as construction activity typically slows during the rainy season in the third quarter, with a subsequent rebound in the fourth.
For the full year 2025, KGI expects HMPRO to deliver a net profit of THB 5.9 billion, down 9% YoY, a result that is closely aligned with its previous projections.
The company’s SSS are projected to contract by approximately 8% for the HomePro format and by 6% for the Mega Home format. KGI cites several factors impacting the sales: a persistent weakness in consumer spending—evidenced by Thailand’s Consumer Confidence Index slipping to 51.9 in December 2025, a high base effect from October 2024 fueled by pent-up demand following flooding, decreased demand this year due to heavy rainfall, flood impacts on key southern regions—especially Hat Yai, and border disputes.
Nevertheless, the company’s aggressive expansion strategy—with new store openings over the past year, growing from 136 outlets in 4Q24 to 146 in 4Q25—is expected to partially offset the impact of weak SSS, bringing estimated 4Q25 sales to THB 16.4 billion (down 4% YoY, but up 5% QoQ).
On the profitability front, HMPRO’s 4Q25F gross margin is anticipated to remain steady at 27.8%, in line with last year but a one percentage point improvement from the previous quarter, as suppliers potentially lower their product rebasing in response to weak sales. For the full year, the gross margin is expected at 26.6%, just 0.2 percentage points below last year, consistent with KGI’s forecasts.
Operating expenses are likely to increase due to ongoing store expansion and costs associated with flooding, notably including renovations needed at a Mega Home store. The SG&A-to-sales ratio for 4Q25 is projected at 21.0%, up from 20.8% in the prior year but slightly better than the previous quarter’s 21.1%.
In the near term, KGI foresees limited earnings visibility for HMPRO due to the absence of substantial government stimulus and continued contraction in SSS in early 2026. As a result, first-quarter of fiscal year 2026 earnings are likely to weaken both YoY and QoQ. While post-flooding demand may provide some sales momentum, margins may remain under pressure in the absence of more favorable supplier terms.
On the brighter side, KGI noted that a potential bottoming out of Thailand’s property sector—after most key indicators hit record lows in 2025—could provide support, especially alongside HMPRO’s ongoing share repurchase program. The recent closure announcement of rival NocNoc also underscores the intensity of competition and stagnant market growth, but KGI believes HMPRO’s established market leadership positions it well for incremental share gains.
KGI maintains its end-2026 target price for HMPRO at THB 7.50, valuing the shares at 16 times forward earnings, or 0.5 standard deviations below the historical average of global peers. The brokerage reiterates an “Outperform” rating, citing HMPRO’s attractive 6% dividend yield (compared to peers’ 2-3%), robust return on equity of approximately 20% (peers: 6-8%), high net margin of 9% (peers: 3-7%), and 8% potential upside to the target price.
Risks to the outlook include a possible economic slowdown, failure to achieve store expansion targets, weak agricultural prices, exposure to natural disasters, and high inventory levels.
