The Siam Cement Public Company Limited (SET: SCC) extended loss on Friday following the bearish market outlook in the Thai stock market and the report of the company cutting capital spending.
The Thai stock market continues to perform sluggishly, losing about 11% of its gain so far this year amid uncertainty in politics, geopolitics, border unrest and natural disasters that hinder growth.
Additionally, Nikkei reported earlier this week that The Siam Cement Group is eyeing a 10% cut to its capital spending plan, citing Chinese exports hurt the company’s profitability. The Japanese media noted that SCC plans to reduce capital expenditure by up to 25 billion baht in the next few years.
Following the report, Krungsri Securities reached out to SCC. According to SCC’s statement, the company will continue with its planned CAPEX for 2025-26, maintaining an annual capital allocation of around 30 billion baht—down from approximately 55 billion baht in 2024. Year-to-date in 2025, only about 22 billion baht has been utilized. The revised investment strategy focuses on essential projects, aiming to conserve liquidity as the petrochemical business faces cyclical headwinds.
Krungsri Securities noted that despite oversupply issues in the petrochemical segment, SCC remains capable of generating stable cash flows, buoyed by improved margins in the cement division following price increases. The firm forecasts a sustainable dividend yield of 3-4% for 2026-27. Share buybacks are not under consideration for capital management at this time.
Looking ahead, the outlook for SCC remains cautious. Short-term catalysts are lacking, and profits in late 2025 through the first half of 2026 may remain volatile, particularly as the HDPE/PP spread is operating below the breakeven point. Additionally, the planned maintenance shutdown of the MOC facility may be brought forward to the first half of 2026, pending developments in restructuring plans among major players in China and South Korea.
Overall, Krungsri has a neutral view on the company with a target price at THB 218 per share.
