Krungsri Securities (KSS) has released its analysis on Stecon Group Public Company Limited (SET: STECON), projecting a net profit of THB 254 million for 3Q26. This marks an increase of 55% year-on-year, but a decrease of 72% quarter-on-quarter.
Nevertheless, the profit outperformed previous estimates of THB 195 million, driven by an acceleration in construction revenue, which reached THB 9.89 billion, up 33.4% year-on-year and 5.8% quarter-on-quarter. The primary contributors to this growth were three key projects: data centers, the Orange Line, and the Purple Line mass transit.
The construction gross profit margin is expected to be 7.1%, nearly unchanged from 7.16% in 2Q26 and an improvement from 6.98% in 3Q25. This reflects effective cost management, including advance procurement and price locking of raw materials, partner negotiations, and cost compensation mechanisms in public sector projects.
The sharp quarter-on-quarter decline in net profit, on the other hand, is attributed to the absence of dividend income from GULF, which contributed THB 736 million in 2Q26 and had already been priced in by the market.
Looking ahead, Krungsri maintains a positive outlook for 4Q26, expecting continued growth in construction income, which is on track to reach a new high. Revenue acceleration is anticipated from the same three main projects, with the quarter projected to outperform 3Q26 due to the absence of disruptions such as rain and flooding.
The brokerage maintains a ‘Buy’ recommendation for STECON, selecting it as the top pick in the contractor sector. The target price for 2027, calculated using the SOTP methodology, is set at THB 24.90, representing a 35% upside.
Short-term positive factors include the stronger-than-expected 3Q26 results, a significant drop in crude oil prices reducing pressure from construction material costs, and clearer regulations for data center projects, which should benefit the company as a leading contender for these contracts.
