As per a report by Finansia Syrus Securities (FSS), the analyst predicts a bullish outlook on The Siam Cement Public Company Limited (SET: SCC), citing a steady core business recovery and noting that the company’s earnings likely bottomed out in 4Q24.
SCC posted a net profit of THB 1.1 billion in 1Q25, with cement demand up 7% year-on-year, improving from 5% growth in the prior quarter, driven primarily by public infrastructure investments.
The cement business also benefited from a 20% price increase in 2Q25, offsetting seasonal volume softness. Profits during the quarter are projected to be the peak for the year, supported by dividend income, stronger operational results, and one-off gains from the acquisition of PT Chandra Asri Pacific Tbk (CAP)’s refinery in Indonesia, through its subsidiary SCGC.
Meanwhile, SCC’s petrochemical segment—which accounts for roughly 40% of total revenue—continues to face headwinds due to market oversupply and weak price spreads. The LSP plant in Vietnam, which boosted SCGC’s output by 40%, was temporarily shut down as prices fell below breakeven.
SCC plans to invest $500 million to shift two-thirds of its feedstock to ethane, aiming to reduce costs by $250 per ton, with completion expected by end-2027. The company is also ramping up production of high-value-added (HVA) products to support margins during the industry downcycle.
Despite high leverage, SCC’s financials remain solid. The 2025 investment budget is set at THB 30–35 billion, down from the THB 60 billion annual average in 2019–2024. Net debt stood at THB 290 billion in 1Q25, and the net debt to equity ratio is forecast to fall to 0.7–0.8 times by 2027.
SCC has also sold a 10.6% stake in Indonesia’s CAP, resulting in accounting gains, lower investment losses, and improved financial structure.
As a result, FSS recommends a ‘Buy’ rating for SCC, with a target price of THB 200 per share based on SOTP valuation.
While short-term pressure persists, the focus on HVA products, green innovation, and cost control remain SCC’s long-term growth drivers. As a leader in HVA, SCC is seen as deserving a valuation premium over peers and should be able to sustain profitability even in challenging market cycles.
