DBS maintains a bullish outlook on Thailand’s construction sector, driven by an impending wave of public and private infrastructure investments. The brokerage highlights Stecon Group Public Company Limited (SET: STECON) as a prime beneficiary, reiterating a BUY rating with an upgraded target price of THB 19 per share, reflecting 1.36x P/BV, which is +2.0 standard deviations above its five-year historical average.
DBS forecasts over THB 700 billion worth of mega infrastructure projects to be tendered between FY26F and FY28F. STECON is expected to leverage its strong position in the sector, particularly amid Thailand’s burgeoning data centre “super cycle.” Limited competition for these high-value contracts further cements STECON’s status as a central player.
STECON’s FY26F earnings are projected to surge by 45% year-on-year to THB 1.49 billion. The growth will be underpinned by robust construction revenue, normalization of gross profit margin, reduced equity losses, and a rise in dividend income from GULF.
DBS is also upbeat on the overall Thai contractor sector, assigning it an OVERWEIGHT rating. The industry is poised to enter a super cycle, with more than THB 2 trillion in infrastructure projects slated for bid between 2026 and 2029, including major developments such as Motorway M5, Motorway M9, and Phase 2 of the Thai–Chinese High-Speed Rail project. FDI inflows, especially into data centres, accounted for 46% of total FDI in FY25, augmenting opportunities for local contractors.
The sector’s FY26F earnings are forecast to reach THB 3.9 billion (+7% y/y), fueled by a rising project backlog, stronger equity income, resilient margins, and absence of provision expenses. Ch. Karnchang (CK) remains DBS’s top pick for the sector.
