Yuanta Securities (Thailand) wrote in its analysis that CH. Karnchang Public Company Limited (SET: CK) is expected to record a year-on-year profit growth in 1Q26, although the figure is likely to slow quarter-on-quarter as its subsidiary, CK Power Public Company Limited (SET: CKP), enters the low season.
Meanwhile, the construction business is anticipated to remain resilient, with gross profit margin (GPM) estimated to be maintained at 7-8%, with SG&A to sales around 5%.
CK has set a clear growth target for 2026, anticipating that the construction sector will enter a new growth cycle from 2026 onwards, with sustained growth expected over the next 3-4 years. This is underpinned by a highly stable government and a significant backlog of pending public sector project tenders.
By the end of 2025, CK’s backlog stood at THB 160 billion, with an estimated annual revenue recognition of about THB 40 billion—equivalent to 90% of CK’s projected revenue for 2026—which can support earnings for another four years. Furthermore, CK is targeting to win an additional THB 260 billion worth of projects in 2026-2028 from a total market value of THB 770 billion.
The company continues to increase its stake in Bangkok Expressway and Metro Public Company Limited (SET: BEM), now holding 44%, which will further boost profit contributions from associates.
While Middle East tensions have driven energy prices higher, oil comprises only about 1% of total construction costs. Every US$1/bbl increase in oil price would affect net profit by just 0.3%. Should oil prices average US$85/bbl for the whole of 2026, following the prolongation of the situation, net profit may be impacted by 5.6%, with some indirect effects on other construction costs.
However, Yuanta expects these effects to be limited, with the Thai government’s recent measures to support public project contractors, including raising the K factor to offset higher costs.
Following these, Yuanta projects CK’s net profit for 2026 at THB 2.19 billion, down 12.3% year-on-year, mainly due to weaker CKP contributions in the second half of 2026, affected by drought conditions.
Nonetheless, upside risks remain from new large-scale public sector projects following the establishment of a highly stable government and the Double Deck project, of which BEM is the project owner, and CK is seen as a strong candidate for construction contracts.
The brokerage notes that CK’s share price has declined 21.2% since the start of the Middle East conflict in late February, suggesting that the negative impact has already been priced in and the stock has reacted more strongly than the actual circumstances.
Year-to-date, the company has gained 21.8%, while STECON has surged 75%. Yuanta sees this as an attractive buying opportunity, maintaining a year-end 2026 fair value target of THB 21.00 for CK, implying a potential upside of 44.8%.
