As per data from CGS International Securities (Thailand) (CGSI), the analyst expressed a cautious stance for Dohome Public Company Limited (SET: DOHOME) following an analyst meeting held on May 13, as short-term financial pressures weigh on the company’s performance.
The company faces a challenging in-store sales environment, with same-store sales growth (SSSG) flat in April and dipping 3-4% month-to-date in May, pulling quarter-to-date figures down to -2-3%.
This decline highlights faltering demand from small contractors and end-consumers, dropping by 3-4%, indicating a significant dip in actual demand. Meanwhile, back-office sales related to projects and wholesale achieved a modest growth of 1-2%, although the lower margins in this segment are becoming more apparent.
Steel product margins offered a slight relief by boosting April’s gross margin to 17.8-17.9% from 17.6% in the first quarter of 2025. However, the increasing reliance on lower-margin back-office sales can hinder further margin improvements.
In an ambitious expansion effort, DOHOME plans to open three new large-format stores in 2025. However, CGSI pointed out potential downside risks to the company’s returns given the current weak demand for construction and home goods—putting extra pressure on fixed costs.
Conversely, the roll-out of 10-12 Dohome To Go stores is seen as a more strategic move. These compact, leased stores are less capital-heavy and unlikely to heavily impact earnings, yet their contribution to revenue may be marginal.
Structurally, DOHOME is taking steps to reinforce its market position through several initiatives: the ‘Nai Chang’ home service aims to engage more end-consumers, while the Technician Family loyalty programme is intended to solidify contractor relationships and encourage repeat sales.
Additionally, new AI-driven pricing and demand forecasting tools could provide margin and sales advantages, although benefits are expected to unfold over several quarters.
In summary, while DOHOME is currently navigating a challenging environment of reduced demand and compressed margins, the analyst suggested that the company’s efforts to drive long-term resilience show promise, contingent on effective execution.
