On Wednesday at 10:35 AM (Bangkok time), the share price of SCG Packaging Public Company Limited (SET: SCGP) rose by 1.17% or THB 0.20 to THB 17.30, with a trading value of THB 146.28 million.
KGI Securities (Thailand) (KGI) notes that the outlook for SCGP is showing signs of recovery in the second half of 2025. This improvement is supported by expectations of increased demand for paper packaging in China, bolstered by Beijing’s GDP growth in the second quarter surpassing expectations at 5.2%.
Additionally, exports of the world’s second-largest economy have continued to grow for the 14th consecutive month, and upcoming economic stimulus packages could create further upside in consumption and the real estate sector, helping to limit the downside risks. Meanwhile, concerns about slowing domestic consumption in Thailand have already been largely absorbed by the market.
The performance of PT Fajar Surya Wisesa Tbk. (Fajar) has improved, which partially offsets the slowdown in the Fibrous unit (FB). However, profit is down year-on-year due to weaker operational results and the full-year recognition of Fajar’s losses.
Despite this, KGI has raised SCGP’s target price to THB 19.50 per share from the previous THB 16.00, with the potential for further upgrades to the company’s profit estimates.
As for Trinity Securities, the analyst expects SCGP’s performance to continue recovering in 2Q25, with steady trends anticipated for the second half of the year, and a more pronounced pick-up in 4Q25.
The brokerage firm has upgraded its recommendation for SCGP to ‘Trading Buy’ and raised the target price to THB 19.55 per share, based on an average PER +0.5SD of 25x, reflecting both the improving operational outlook and optimism regarding potential progress in international trade deals. SCGP’s share price has already climbed more than 31% in the past three months.
SCGP is expected to report a net profit of THB 965 million for 2Q25, a 33% decline year-on-year but a 7% increase quarter-on-quarter, driven by higher sales volumes—particularly in packaging boxes and processed foods, which benefited from a 90-day front loading.
The food service packaging business continues to perform well overseas, even as domestic sales weaken due to declining tourist numbers. Overall selling prices remain under pressure from intense competition, especially from Chinese products.
The analyst upholds its 2025 profit forecast for SCGP at THB 3.3 billion, with first-half earnings expected to reach THB 2.8 billion, or 55% of the full-year estimate. There is upside risk to this forecast if the company maintains its operational momentum in the second half of the year.
