KCE Electronics Public Company Limited (SET: KCE) has reported a resilient performance for the first quarter of 2026, managing a slight increase in net profit despite significant revenue pressure from a strengthening Thai Baht and rising raw material costs.
The Group’s net profit for Q1 2026 rose to Bt234 million, a 1.94% increase compared to Bt230 million in Q1 2025. This bottom-line growth was achieved despite a 6.1% year-on-year decline in total revenue, which fell to Bt3,218 million from Bt3,426 million in the previous year.
The primary driver behind the reported revenue decline was the appreciation of the Thai Baht against the U.S. Dollar. Management noted that while sales revenue in Baht terms dropped 6.5% year-on-year, sales measured in U.S. Dollars actually showed a slight increase of 0.5%, indicating stable underlying demand. The stronger Baht negatively impacted revenue translation by approximately Bt125.6 million compared to the same period last year. Additionally, annual price reductions requested by customers further impacted revenue by an estimated 2%.
KCE faced mounting cost pressures from global geopolitical tensions, which drove up the prices of gold, silver, and particularly copper. Rising copper prices alone increased product costs by 2.41% year-on-year. To counter these trends, the company intensified cost optimization initiatives, including workforce reductions and the adoption of energy-efficient machinery.
These efforts were reflected in a 9.04% reduction in Selling and Administrative expenses, which dropped to Bt373.3 million. Furthermore, the company’s strategic shift toward higher value-added products, such as High-Density Interconnect (HDI) PCBs—which now account for 30% of sales—helped maintain a gross profit margin of 17.7%, slightly up from 17.4% in Q1 2025.
Regional performance was mixed: shipment volumes to the United States grew by 4.6% year-on-year, while the Chinese market saw a sharp 35% volume decline due to intense local competition. While KCE expects higher input costs to hit more significantly in the coming quarters, the company remains focused on its disciplined strategy of optimizing existing capacity before resuming its factory expansion plans.
