Yuanta Securities (Thailand) wrote in its analysis regarding Synnex (Thailand) Public Company Limited (SET: SYNEX) that the company reported a 1Q26 net profit of THB 221 million. Excluding a foreign exchange loss of THB 2.1 million and a fair value gain from financial instruments of THB 46.0 million, normalized profit stands at THB 177 million, representing an increase of 10% quarter-on-quarter (QoQ) and 17% year-on-year (YoY).
This result exceeds the brokerage’s estimate by approximately 5%, primarily due to a higher-than-expected share of profit from associates.
Total revenue was THB 11.3 billion, a decline of 9.2% QoQ but an increase of 1.4% YoY. This figure is about 3% below Yuanta’s forecast, with the revenue from the Apple product segment remaining below potential due to ongoing product shortages.
Conversely, the Enterprise segment benefited from tax incentives, particularly related to solar cell products, while the Commercial market continued to expand due to private sector procurement projects. The Gaming segment also demonstrated robust demand.
Gross profit margin stood at 3.9%, an increase of 32 basis points QoQ and 6 basis points YoY, and was in line with expectations. However, SYNEX’s gross profit margin expansion remains lower than that of other IT retailers due to its customer base comprising primarily enterprise clients and major dealers with stronger bargaining power. Furthermore, the company’s product portfolio is more diverse compared to typical retail distributors.
Selling, general, and administrative expenses (SG&A) were recorded at THB 257 million, down 0.2% QoQ and 4.1% YoY, reflecting effective and ongoing cost control measures.
The share of profit from associates was THB 47 million, up 40.4% QoQ and 35.1% YoY, mainly attributable to NCAP, which reported a net profit of THB 179 million, up 33% YoY. This was supported by increased interest income from hire purchase loans and reduced expected credit losses (ECL). The higher-than-anticipated contribution from associates was the key driver for SYNEX’s better-than-expected results.
Interest expenses amounted to THB 26 million, declining 15.9% QoQ and 33.5% YoY, illustrating continued effective cost management, even as the company maintained high inventory levels to mitigate the impact of IT product shortages in certain categories.
SYNEX’s normalized profit for 1Q26 accounts for 25% of Yuanta’s own full-year 2026 profit projection of THB 705 million, an 8% increase YoY. For 2Q26, the brokerage expects continued benefit from existing low-cost inventory. Nevertheless, during the second half of 2026, the company is likely to face increased headwinds from ongoing product shortages in certain categories and rising IT product costs. These factors will present significant challenges to sustaining margin and profit growth.
Yuanta maintains the 2026 year-end target price at THB 10.80 per share, based on a 2026 price-to-earnings ratio (PER) of 12.9x, which is 0.75 standard deviations below the historical mean. Recommendation remains ‘Trading,’ with SYNEX currently trading at approximately 11.6x 2026 PER and an expected dividend yield of around 5.4%. This valuation still appears undemanding, but the lack of short-term catalysts, along with supply chain and cost risks in the second half of the year, limits the upside from current levels.
In the short term, Yuanta expects the share price to react neutrally despite better-than-expected earnings, as much of the profit upside was driven by increased associate contributions rather than a fundamental recovery in the core business. The 2026 full-year profit projection remains within a reasonable range, and there is currently no compelling reason for a significant upward revision.
