KGI Securities (Thailand) wrote in its analysis on the performance outlook for Home Product Center Public Company Limited (SET: HMPRO), noting a subdued consumer spending trend during the first two months of the second quarter of 2026.
HMPRO’s same-store sales growth (SSSG) showed signs of improvement in April, posting positive low-single-digit growth for the HomePro format and positive mid-single-digit growth for the Mega Home format. However, the momentum weakened in May, with SSSG turning to negative low single digits for HomePro and remaining flat for Mega Home.
This performance closely tracks the continued decline in Thailand’s Consumer Spending Index, which dropped to 49.5 in May 2026—a third consecutive monthly decrease and the lowest reading in 42 months.
While there is expected improvement in 2Q26 SSSG compared to the first quarter (which saw declines of 13% for HomePro and 4% for Mega Home), KGI cautions that meaningful positive SSSG will remain difficult to achieve in the near term. The brokerage anticipates SSSG to stay around 0% or increase only at a very low single-digit rate.
Looking at the earnings outlook for Q2, KGI expects profits to slip both year-on-year and quarter-on-quarter. While HMPRO could benefit from lower inventory costs, adjusted average selling prices, and further expansion of house-branded products, factors such as a less favorable product mix (with greater emphasis on electrical appliances during the early summer, which typically accounts for 10-15% of sales), more intense promotional campaigns, and reduced supplier rebates due to weaker sales may limit year-over-year margin expansion.
As a result, second-quarter earnings are projected to decline slightly compared with both the previous quarter and the same period last year.
Nonetheless, KGI maintains expectations for HMPRO’s year-on-year earnings to grow in the second half of 2026, thanks in part to a low base in 2H25, which was impacted by factors such as heavy rainfall, flooding in Southern Thailand, and the Thai-Cambodia border disputes.
Due to ongoing weak spending sentiment and persistently sluggish conditions in the property sector, the brokerage has taken a more conservative approach, revising its 2026-2027 earnings forecasts for HMPRO downward by 3-5%.
This adjustment reflects several factors: a lowered SSSG assumption to -2.5% for 2026 (from -2%) and -0.5% for 2027 (from 0%); a 10-basis-point cut in expected gross margin for 2026; and an unchanged SG&A expense assumption, anticipating potentially higher operating costs.
On the valuation front, KGI maintains an ‘Outperform’ rating on HMPRO and rolls forward the target price to the first half of 2027, setting it at THB 7.10 (up from THB 7.00), based on a PER of 16x, which is 0.5 standard deviation below the historical average for global peers.
Notably, the earnings outlook for HMPRO may appear less robust than for its peers, such as Dohome (DOHOME), forecast to achieve 11% YoY growth, and Siam Global House (GLOBAL), set for 8% YoY growth.
Meanwhile, the stock is supported by a hefty 6% dividend yield (compared with 2-3% for peers), a high return on equity of roughly 20% (versus 6-8% for peers), a strong net margin of around 9% (compared to 3-7% for peers), and its share buyback program. With its current trading valuation at a PER of 13-14x, HMPRO presents limited downside risk in the brokerage’s view.
