KGI Securities (Thailand) anticipates Neo Corporate Public Company Limited (SET: NEO) will continue its robust double-digit sales growth into the third quarter of 2026. This comes on the back of an impressive 20% year-on-year sales surge during July and August, following an 18% year-on-year growth in the previous quarter.
The solid momentum is attributed to the government’s ‘Thai Chuay Thai’ Plus co-payment scheme, which has positively impacted all product categories, alongside ongoing new product development and product relaunches. Selective price increases of 4-5% implemented from July are also expected to bolster revenue. The momentum is forecast to persist into the final quarter, aided by strong seasonal demand.
Lower costs, particularly for crude palm kernel oil (CPKO), are easing margin pressures for NEO. In August, CPKO prices dropped 7% month-on-month to $2,264/mt, with the third-quarter average falling 3% quarter-on-quarter to $2,323/mt due to softened demand and higher seasonal production.
Surfactant and packaging prices are also trending down toward pre-Middle East conflict levels, further supporting margin improvement. KGI estimates that the gross margin for 3Q26 will rise to 38-39%, compared to 37% in 3Q25 and 38.4% in 2Q26.
KGI maintains its earnings projections for NEO at THB 648 million for 2026 (+15% year-on-year) and THB 729 million for 2027 (+13% year-on-year), confident in the company’s sustained revenue growth and improving margins. The outlook for 3Q26 is positive, with expectations of both year-on-year and quarter-on-quarter earnings improvement.
Reiterating their positive stance, the brokerage assigns an ‘Outperform’ rating on NEO, with an unchanged end-2027 target price of THB 26.70 per share, based on an 11x PE multiple.
