Yuanta Securities (Thailand) wrote an analysis on Tipco Asphalt Public Company Limited (SET: TASCO), forecasting that the company’s profit for the second quarter of 2026 will likely be the lowest of the year, before recovering in Q3. Normalized profit is expected to decline both quarter-on-quarter and year-on-year, with lower overall sales volume of asphalt.
This is attributed to two main factors: First, contractors have slowed work and delayed asphalt orders following significant price increases in March and April 2026, which in turn subdued asphalt consumption. Although the government introduced support measures for K-factor costs in May 2026, the impact was relatively limited. Second, international sales volume has also softened due to seasonal effects, following a period of accelerated demand in Q1 prompted by supply shortage concerns.
Yuanta also expects TASCO’s gross margin in 2Q26 to contract both QoQ and YoY, as selling prices in the domestic market have normalized after previous surges. This was caused by the delayed projects, while Thailand entered the rainy season.
International selling prices, on the other hand, remain somewhat elevated compared to normal levels, while revenue from construction and road maintenance services is expected to remain robust, supported by ongoing recognition from infrastructure projects.
Looking forward to 3Q26, Yuanta anticipates a turnaround, with normalized profit likely to grow both QoQ and YoY. This expected recovery is driven by:
- Higher domestic revenue and improved gross margins, supported by a likely acceleration of government disbursements for the 2025 fiscal budget in late 3Q26, thus fueling demand for asphalt and accelerating construction and road maintenance revenue recognition. The company’s backlog stands at approximately THB 6 billion, with 80-90% attributable to public sector projects. As of now, THB 429 billion of government investment budget remains undisbursed, accounting for 53.2% of the total—a figure that is both delayed and below target;
- Early signs of recovery in international sales, as advance asphalt orders are already being placed through the end of 2026, indicating an upturn in export volumes in the second half of the year. TASCO is maintaining its 2026 sales volume target of 1.15 million tons, with 1Q26 sales already accounting for 24% of that annual target. Although a slowdown is anticipated in 2Q26, this is expected to be offset by stronger volumes in the second half.
As a result, Yuanta maintains a ‘Buy’ recommendation for TASCO, setting a target price at THB 17.40 per share. The company’s normalized profit for 1Q26 accounted for 31% of the full-year forecast. While profit growth is expected to resume in 3Q26, the 2Q26 slowdown has prompted the brokerage to maintain the full-year 2026 profit estimate at THB 1.56 billion, representing 57% YoY growth.
The target price is based on a PBV valuation of 1.8x, in line with the five-year historical average. With the stock down 5.9% year-to-date—underperforming the SET Index, which is up 25.2% YTD—the challenging 2Q26 outlook appears largely priced in, according to Yuanta.
