Kiatnakin Phatra Securities (KKPS) has provided a cautiously optimistic assessment of Home Product Center Public Company Limited (SET: HMPRO) following the latest analyst meeting. While near-term prospects look positive, both KKPS and the company share concerns about the latter half of 2026, owing to potential declines in consumer sentiment should geopolitical uncertainties persist.
HMPRO adjusted its full-year same-store sales (SSS) guidance for its core HomePro business, lowering expectations from low single-digit growth to slightly negative or flat, following a subdued performance in the first quarter. In contrast, Mega Home is expected to sustain positive SSS for the year.
At the group level, management anticipates that weaker sales will be partly offset by a targeted 20 basis point margin improvement, driven by average selling price increases and a higher proportion of private brand and other high-margin products. Despite signs of recovery expected for Q2, challenges remain, particularly regarding demand from new home-buyers, which could constrain any significant re-rating of the stock. KKPS maintains its “Neutral” rating on HMPRO with a target price of THB 7.58.
Currently, quarter-to-date SSS have improved, with HomePro posting 2% increase and Mega Home reporting 5% gain, rebounding from Q1’s declines of 12.7% and 3.7%, respectively. The improvement is attributed to increased demand for cooling products, price adjustments, stockpiling behavior, and base effects as government tax breaks recede. Margins have continued to benefit from these trends, with a 42 basis point year-on-year increase in Q1, and HMPRO expects minimal impact from higher diesel prices as most costs are passed on to vendors.
HMPRO’s operating cash flow will be directed towards store expansion (THB 6-7 billion CAPEX in 2026), maintaining a dividend payout ratio of about 80%—translating to a 6.5% yield at current prices—and a THB 3 billion share repurchase program per tranche, supporting its capital management policy.
