KGI Securities has upgraded STECON Group (SET: STECON) to Outperform from Neutral, raising its 12-month target price to Bt16.40 per share from Bt13.00, implying an upside of 15.5% from the 22 May 2026 closing price of Bt14.20. The upgrade reflects growing confidence in STECON’s ability to capitalize on accelerating private and public investment across Thailand.
Data Centers Drive Private Sector Opportunity
Thailand has seen record investment promotion applications since 2024, fuelled by FDI exceeding Bt1 trillion per annum through early 2026, with data centers and digital infrastructure among the primary drivers. The Thai Data Center Association projects the country’s data center capacity to nearly triple — from 350MW in 2024 to 1GW by 2027 — backed by an estimated US$6.5 billion in investment.
To tap this trend, STECON has set up a dedicated business unit focused on constructing data centers and developing an end-to-end ecosystem for clients. It currently has four data centers worth Bt15.5 billion under construction, and is targeting bids for three additional projects valued at Bt22.5 billion. The total value of private projects awaiting bidding has risen 37% year-on-year to Bt73.5 billion at end-1Q26.
Public Infrastructure Adds to Pipeline
On the public side, major upcoming projects — including the M9 and M5 motorways and the Kratu-Patong expressway — worth over Bt100 billion are expected to be tendered under the PPP scheme, in which STECON and CH. Karnchang (SET” CK) can jointly bid.
Guidance Reaffirmed, Earnings Trimmed
Management reaffirmed its 2026 full-year revenue guidance of Bt35 billion with a 7% gross margin target and Bt50 billion in new backlog. The current backlog stands at Bt123 billion — sufficient to sustain revenue recognition over the next three years. New businesses in the pipeline include two data center deals, two renewable energy deals and one deal each for logistics and new ventures.
However, KGI trimmed its 2026F net profit forecast by 12% to Bt1.64 billion (-16% YoY), reflecting higher energy and construction material costs. The brokerage also cautioned that 2Q26 earnings are expected to represent the year’s peak, boosted by an exceptionally high one-off dividend from Gulf Development (SET: GULF) of Bt3.25 per share or Bt736 million. For 2027F, earnings are projected to normalize to Bt1.3 billion (-20% YoY) as dividend income from GULF returns to a standard level.
Additionally, key risks include slower-than-expected GDP growth, delays in Cabinet approvals, regulatory changes, rising interest rates, and a minimum wage hike.
