On Friday at 3:47 PM (Bangkok time), the share price of Home Product Center Public Company Limited (SET: HMPRO) jumped by 3.94% or THB 0.25 to THB 6.60, with a trading value of THB 589.36 million.
Krungsri Securities (KSS) expects HMPRO to report a normalized profit of THB 1.39 billion in 3Q26, representing growth of 6% year-on-year but a decline of 13% quarter-on-quarter, in line with seasonal trends during the rainy season. Year-on-year profit growth is anticipated to be driven by an improved gross profit margin, while quarter-on-quarter performance is softer due to seasonality.
Sales and service revenue for the period is projected at THB 16.4 billion (+2% year-on-year, -6% quarter-on-quarter), supported by network expansion, including the conversion of six branches to Hybrid Stores and the addition of four new branches, bringing the total number of branches to 134 at the end of Q3.
Despite these expansions, same-store sales at HomePro stores, accounting for 80% of total sales, are expected to contract by 2.5%, compared to a 0.9% decline in 2Q26, due to weak purchasing power and heavier rainfall compared to 3Q25. Quarter-on-quarter revenue is expected to decrease due to seasonality and the impact of flooding at the end of the quarter.
The GPM is estimated at 28.5%, stable quarter-on-quarter but up from 27.7% in 3Q25 due to a higher proportion of private brand products and price adjustments made in the first half of the year. However, SG&A expenses as a percentage of sales are expected to rise to 21.1%, up from 20.5% in 3Q25, attributed to higher staff costs, expenses for new branches, and increased credit card fees. Interest expenses are projected to decrease by 9% year-on-year, reflecting the prevailing interest rate trend.
Looking ahead, normalized profit in 4Q26 is expected to improve slightly both year-on-year and quarter-on-quarter, benefiting from increased demand for repair and renovation products following the floods. However, the recovery in SSS may be limited by weak consumer purchasing power. Normalized profit for the first nine months of 2026 should account for 74% of the full-year estimate, in line with last year.
Krungsri maintains its full-year normalized profit forecast for 2026 at THB 5.95 billion, representing a 1% decline year-on-year, with the company’s core strategy in 2027 focusing on stability. HMPRO is expected to add only 3-4 new branches in 2027, with SSS projected to gradually recover to +2% from -1% in 2026, supporting a 7% year-on-year normalized profit growth for 2027.
As a result, the brokerage maintains a ‘Neutral’ rating on HMPRO, with a 2027 target price of THB 7.00 per share, noting that while earnings growth is expected to resume in 2027, the recovery remains highly dependent on an improvement in SSS. With only limited branch expansion planned, there are insufficient near-term catalysts for a re-rating.
Key factors to watch include a recovery in consumer purchasing power and government stimulus measures. Krungsri thus recommends holding the stock for dividends while awaiting a clearer rebound in SSS.
