The Siam Cement Public Company Limited (SET: SCC) reported robust earnings in the first quarter of 2026, prompting bullish outlooks from both Morgan Stanley and CLSA, with target prices of Bt270 and Bt250, respectively.
Morgan Stanley highlighted a potential consolidation of Thailand’s olefin assets between SCC and PTT Global Chemical (SET: PTTGC), which emerged as a significant positive surprise. The consolidation could provide substantial benefits in naphtha sourcing, ethane feed, and better pricing power. SCC’s reported core profit of Bt3 billion surpassed both Morgan Stanley and market expectations amid strong free cash flow performance. Chemical sales volumes were higher than anticipated, declining just 3% quarter-on-quarter despite a scheduled shutdown of a third of capacity. Additionally, SCC’s net debt saw a marginal decline as capex spending ran 25% below normalized levels.
Similarly, CLSA rated SCC as “Outperform” following a swing to a 1Q26 net profit of Bt6.2 billion, a strong recovery from the Bt2.6 billion loss in the previous quarter and a 466% year-on-year improvement. Key drivers were improved performances in the cement and packaging segments, as well as a notable stock gain. The brokerage flagged feedstock availability as the key issue for near-term performance, noting that LSP can operate until mid-May and MOC until mid-July. CLSA also acknowledged the ongoing feasibility study for the potential chemical joint venture with PTTGC, expected to conclude in 3Q26.
Overall, both brokerages maintain optimistic views on SCC, underscoring positive momentum from recent financial results and the anticipated joint venture.
SCC 1Q26 earnings
Yesterday, SCC reported a robust financial performance for the first quarter of 2026, highlighted by a massive 466% year-on-year (YoY) surge in net profit. Despite a slight dip in overall revenue, the company successfully leveraged internal efficiency programs and favorable inventory adjustments to navigate a volatile global landscape.
SCC’s profit for the period reached 6,223 million baht, a significant leap from the 1,099 million baht recorded in Q1/2025. This bottom-line growth was supported by a 36% YoY increase in reported EBITDA, which climbed to 17,499 million baht. However, Revenue from Sales saw a marginal decline of 1% YoY, totaling 123,327 million baht. This slight contraction was primarily due to softer sales volumes in the packaging (SCGP) and smart living segments, even as the chemicals business (SCGC) saw a 6% revenue uptick.
The primary catalyst for the profit jump was an inventory gain of 4,172 million baht within the SCG Chemicals (SCGC) segment. Furthermore, performance was bolstered by higher cement prices and the continued market penetration of Low Carbon Cement, which now boasts a penetration rate of over 80% in Thailand. Internal efficiency improvements and lower production costs in the cement and packaging units also contributed to the resilient margins.
Expense Management and External Headwinds SCC demonstrated strong financial discipline, reducing its net finance and interest costs to 2,506 million baht, down from 2,829 million baht in the same period last year. The average interest rate dropped to 3.1% from 3.4% YoY.
Challenges remain, particularly in the petrochemical sector. The ROC cracker in Thailand was temporarily shut down in March 2026 due to feedstock shortages stemming from geopolitical tensions in the Middle East. While the vinyl chain saw tightened spreads, the olefins chain benefited from supply tightness that widened product spreads. Moving forward, SCC remains focused on its “deleveraging efforts” and maintaining high cash-on-hand, which stood at 67,137 million baht at the end of the quarter.
PTTGC and SCGC JV
Additionally, PTTGC disclosed to the Stock Exchange of Thailand that on April 29, 2026, the company has entered into a non-binding Memorandum of Understanding with SCG Chemicals Public Company Limited (SCGC) to comprehensively explore a potential strategic formation of a joint venture of their respective olefins and polyolefins (Polyethylene, Polypropylene) businesses in Thailand.
The scope of the potential joint venture includes the company’s olefins and polyolefins assets in Thailand, and SCGC’s olefins and polyolefins business units in Thailand, including crackers, polyethylene (PE) and polypropylene (PP) production facilities, as well as relevant SCGC’s joint venture companies.
The objective of this potential joint venture is to establish a leading petrochemical player in the region, reinforcing the global competitive advantage of Thailand’s integrated infrastructure. The potential joint venture is expected to enhance operational excellence by leveraging greater scale and advantaged feedstock position with strengthened downstream capabilities in higher-value, differentiated products. These efforts will create a broader and more resilient product portfolio mix.
