KGI Securities noted in its analysis that Thailand’s home improvement sector is bracing for a more challenging outlook in the second half of 2025, as a series of economic headwinds—including weaker GDP growth, falling tourist numbers, and soft consumer sentiment—pile pressure on retailers’ sales and earnings.
So far this year, the Thai economy has been disappointing. GDP grew just 3.1% year-on-year in the first quarter, and consumption rose a subdued 2.6%. Tourism recovery remains tepid, with 14.4 million arrivals in the first five months—down 3% year-on-year and far from pre-pandemic levels.
A downturn in the Consumer Confidence Index, now down for three months straight to 55.4 in April, and falling farm incomes have further dampened the outlook. Meanwhile, government spending—a key driver for domestic demand—has lagged expectations, with budget disbursement at just 31.2% in May, below the historical average.
In this climate, home improvement retailers are under pressure. Same-store sales (SSS) for Dohome (DOHOME), Siam Global House (GLOBAL), and Home Product Center (HMPRO) all weakened at the beginning of the second quarter. DOHOME’s SSS dropped about 5-6% in April-May, while HMPRO’s sales saw high single to double-digit declines, and GLOBAL’s fell into negative double-digits—all worse than their first-quarter performances.
An analysis of these companies’ recent financial history reveals that while HMPRO has managed strong earnings growth and good cost control over the past two decades, its growth momentum has likely peaked and efficiency gains may have reached their limits.
GLOBAL, which benefited from expanding margins in prior years, also appears to be entering a more mature, slower-growing stage, with cost-saving likely to be the key to future profitability. DOHOME, meanwhile, continues to struggle to translate double-digit sales growth into earnings gains, encumbered by a stretched balance sheet and escalating competition.
Price-to-earnings ratios for HMPRO and GLOBAL have historically hovered around 30x, a level justified in the past by robust earnings growth. However, with both companies facing a more mature growth phase and stabilizing profits, such lofty valuations appear increasingly difficult to sustain.
At the same time, DOHOME is still grappling to shift into sustained growth mode amid fierce competition, and with no earnings expansion over the last five years, the company does not warrant a valuation premium.
In response to these trends, KGI has lowered PER targets across the board—assigning HMPRO a 16.5x multiple, GLOBAL 15.0x, and DOHOME 12.0x, reflecting their respective earnings trajectories and financial strength.
Given these conditions, KGI Securities rates both HMPRO and GLOBAL as ‘Neutral’ with end-2025 target prices of THB 8.20 and THB 5.30, respectively. DOHOME is rated ‘Underperform’ with a THB 2.60 price target.
With the industry showing clear signs of maturity and the consumer outlook clouded by economic uncertainties, the brokerage firm has downgraded its overall outlook for the segment to ‘Neutral’ from ‘Overweight’.
