On Friday, the share price of Stecon Group Public Company Limited (SET: STECON) at the time of 2:57 p.m. was at THB 18.80, a THB 0.50 or 2.73% increase, with a total trading value of THB 385.71 million.
TISCO Securities stated that although the end of the ceasefire agreement between the United States and Iran on July 8 has renewed market concerns about commodity cost risks—especially in the construction sector—the impact on STECON is expected to be limited as the company has a cost structure that can partially hedge such risks.
Meanwhile, the Constitutional Court’s ruling on July 9, which approved the THB 400 billion Emergency Loan Decree, reduces policy uncertainty and restores market confidence. However, these funds are not expected to directly benefit STECON’s major construction projects, as they are mainly intended for consumer assistance measures and the transition to clean energy, rather than supporting infrastructure or data center investments.
TISCO estimated that STECON still possesses strong long-term fundamentals, with a backlog valued at THB 122.8 billion, equivalent to approximately 3.6 times the predicted revenue for 2026, alongside numerous government infrastructure projects pending investment.
Additionally, the company is positioned to benefit from a new cycle of private sector investment, particularly in data center and power plant projects, due to its strong construction partnership with Gulf Development Public Company Limited (SET: GULF), which plans to increase total production capacity by around 43.6% by 2035.
The research firm believes these factors place STECON in an advantageous position to secure contracts from Thailand’s largest private investment wave in a decade, driving medium- to long-term revenue and earnings growth.
Regarding the impact of the Middle East conflict, TISCO does not expect a significant effect on STECON’s costs, as the company subcontracts approximately 50 – 60% of its work and has locked in construction material costs for about six months in advance, mitigating short-term raw material price volatility.
For the 2Q26 performance outlook, STECON is projected to report a net profit of THB 919 million, up 79.4% year-on-year and 161.9% quarter-on-quarter, supported mainly by THB 736 million in dividend income from GULF.
TISCO slightly revised down its 2026 net profit forecast by 2% to THB 1.85 billion. However, excluding extraordinary items, operating profit is expected to grow by as much as 65% from the previous year. The decline in net profit is attributed to a higher base in 2025 with substantial one-off gains.
For 2027, net profit is projected at THB 1.33 billion, decreasing from 2026 due to the absence of this year’s exceptionally high dividend income from GULF.
TISCO maintains its “Buy” recommendation for STECON, raising the target price under the sum-of-the-parts method to THB 21.10 from THB 20, after adjusting the investment value in GULF to the new target price of THB 82 per share. This reflects about a 15% upside from the share price of THB 18.30.
Risks to monitor include the potential rise of construction costs from the prolonged U.S.-Iran conflict, competition from Chinese contractors in data center tenders, delays in project acquisition, uncertainty over GULF’s dividend assumptions, and potential debt increase from debenture issuance.
