On Wednesday at 12:04 PM (Bangkok time), the share price of SCG Packaging Public Company Limited (SET: SCGP) fell by 3.85% or THB 0.80 to THB 20.00, with a trading value of THB 431.62 million.
Krungsri Securities (KSS) wrote that SCGP reported a 4Q25 net profit of THB 1,207 million, representing a substantial turnaround from a net loss of THB 57 million in 4Q24 and an increase of 27% quarter-on-quarter.
Excluding special items from the MYPAK acquisition profit (THB 1,072 million) and others, normalized profit stood at THB 822 million, showing a significant increase year-on-year while suggesting a 18% decline quarter-on-quarter. The figure is 8% below expectations due to gross profit margin pressure caused by intense pricing competition.
The QoQ profit decline was attributed to aggressive pricing strategies aimed at capturing market share during a pre-New Year inventory buildup period, leading to price competition in both Integrated Packaging (IPB) and Fibrous Chain segments. This dragged the gross profit margin (GPM) down to 17.4%, compared to 13.8% in 4Q24 and 18.0% in 3Q25.
Additionally, SG&A to sales rose to 13.6%, compared to 12.1% in 4Q24 and 12.3% in 3Q25, due to higher transportation costs and increased expenses in asset revaluation. China’s adjustments in paper usage also led to short-term price volatility.
Normalized profit for 2026–2028 has been revised up by 4% and 2%, reflecting the inclusion of MYPAK, debt restructuring, and price reductions. The outlook for normalized profit in 1Q26 is positive both year-on-year and quarter-on-quarter, with gross profit margin anticipated to improve, benefiting from lower paper costs (lag effect), helping offset flat sales volumes during the Indonesian and Vietnamese holiday season, and around 16 days of dissolving pulp mill maintenance shutdown.
Krungsri noted that SCGP’s target price for 2026 has been revised to THB 18.0 (previously THB 17.5), with the “Reduce” recommendation maintained, as the recovery of testliner prices in line with Chinese corrugated paper and lower raw material costs from China’s ban on recycled paper (leading to direct corrugated paper imports) is expected to be short-lived.
Short-term volatility is seen as partly driven by pre-shutdown inventory stocking ahead of certain Chinese mills’ maintenance closures. Notably, Chinese corrugated paper prices have dropped by 9% year-to-date, now back to late October 2025 levels before the November-December 2025 surge.
Krungsri expects regional competition to remain high, while the share price is seen as likely already reflecting a recovery, with Forward PER26 standing at about 20x, versus profit growth of +9% CAGR in 2025–2027 and the sector average of approximately 16x.
