Siam Cement Public Company Limited (SET: SCC) is attracting bullish attention from Morgan Stanley as analysts resumed coverage of the Thai industrial giant, tagging it as an “Overweight” and naming it among its as the most leveraged play on a recovery in the chemical cycle in Asia.
Morgan Stanley’s research team asserts that Siam Cement is a prime beneficiary of an anticipated recovery in regional chemical markets. According to their latest note, a rebound in the cycle is expected to allow SCG to relaunch operations at a key new facility, providing a significant boost to group earnings as margins start to improve. The analysts put the likelihood of a share price rise over the next two weeks at over 80%, describing the scenario as “highly likely.”
Recent improvements in group capital allocation, as well as signs of turnaround in the cement and paper segments, add to the positive outlook. SCG’s shares are currently trading at an attractive 0.8 times expected 2026 tangible book value, a level that, in Morgan Stanley’s view, implies the market is pricing in continued core chemical and packaging losses into 2027.
Morgan Stanley bases its price target on a price-to-tangible-book-value multiple of 1.2x applied to projected 2026 tangible book value, reflecting the expectation that investor sentiment will shift as confidence returns to the group’s recovery story. Tangible book is calculated after stripping out goodwill and intangibles from shareholder equity.
Nevertheless, risks remain. Upside is closely tied to further improvements in polyolefin margins, disciplined capacity management, and effective capital deployment for growth. On the downside, the analysts caution investors to watch for weak signs of capacity discipline in chemicals, ongoing margin pressures in the cement and packaging businesses, and capital expenditure that drifts away from core segments.
Morgan Stanley set a target price of SCC at THB 285 per share, representing a 30% upside from the closing price of THB 219 per share last Friday.
