On Tuesday at 12:04 PM (Bangkok time), the share price of Stecon Group Public Company Limited (SET: STECON) gained 2.67% or THB 0.50 to THB 19.20, with a trading value of THB 666.88 million.
KGI Securities (Thailand) wrote that STECON’s operating performance for 2Q26 is likely to reach its annual peak, with an expected net profit of approximately THB 850 million. This forecast is largely supported by an unusually high level of dividends received from Gulf Development Public Company Limited (SET: GULF), amounting to THB 3.25 per share, resulting in total dividend income of around THB 736 million.
For 1H26, net profit is estimated at about THB 1,200 million, representing 68% of the full-year profit forecast. The company is scheduled to hold an analyst meeting in the first week of August 2026 to discuss Q2 results and provide guidance for the remainder of the year.
As of the end of 1Q26, STECON reported a backlog of approximately THB 123 billion, including around THB 27 billion from the U-Tapao Airport project. This backlog is deemed sufficient to support revenue recognition over the next three years. Most recently, the company was awarded a new project worth THB 435 million, part of the Bangkok Mass Transit Authority’s (BMTA) EV Bus system upgrade, which will further add to its backlog and support future revenue recognition.
Management has maintained its 2026 revenue target at approximately THB 35 billion, with about 21% of the full-year target already realized in Q1. STECON is also targeting a gross margin of 7% and aiming for new project awards totaling THB 50 billion. As of the end of Q1, new projects accounted for approximately 14% of the annual target, highlighting the need to monitor upcoming project bidding and contract signings.
KGI had previously assumed a 7% gross margin and selling and administrative expenses at 3.8% of revenue for 2026 to reflect potential risks from rising energy and construction material costs due to ongoing Middle East tensions. However, given STECON’s cost management capabilities, the brokerage has revised its gross margin assumption up to 7.2% for 2026, following the 7.8% achieved in Q1, and has adjusted the selling and administrative expense ratio down to 3.6%.
KGI maintains its 2026 revenue estimate at THB 35 billion and dividend income from GULF at THB 736 million, resulting in an upward revision of the 2026 net profit forecast by 6% to THB 1,740 million.
For 2027, the brokerage has increased its net profit estimate by 13.5% to THB 1,480 million, anticipating revenue growth of 10%, higher than the previous forecast of 7%. Improved margins and dividends from GULF, projected at around THB 340 million (THB 1.50 per share, up from THB 1.20), are also expected to contribute.
Furthermore, KGI remains positive on the outlook for private investment, expecting gross fixed capital formation to expand from a contraction of 0.3% in 2024 to growth of 4.9% in 2025 and 5.9% in 2026. A key driver is the recovery in private investment, which is expected to rebound from contractions in 2024 and 2025 to growth of 5.9% in 2026. Notably, the Private Investment Index has grown year-on-year for the past six months.
In the digital industry segment, requests for investment promotion from the Board of Investment (BOI) have reached approximately THB 746 billion, a 394% increase year-on-year, with approved projects totaling around THB 623 billion, up 517%. Much of this growth is driven by investments in data centers and digital infrastructure, now accounting for about 50% of all the requests and approvals from the BOI, presenting significant opportunities for STECON.
The BOI has established a special committee to accelerate data center project approvals. In response, STECON has set up a new business unit to handle data center construction projects, explore potential joint investments, offer total solutions, and develop business ecosystems to create long-term revenue streams.
As a result, KGI maintains a ‘Buy’ recommendation on STECON, raising the target price to THB 20.50 from THB 16.40, based on a 2027 PER of 21x, which corresponds to the long-term average. This target price does not include the value of the 226.5 million GULF shares that STECON owns, which have an estimated market value of about THB 15 billion, or around THB 10 per share.
