CGS International Securities (Thailand) (CGSI) wrote in its analysis of the real estate development sector, evaluating the financial performance of nine listed property developers in 1Q26. The companies included in the study are AP (Thailand) (AP), Land and Houses (LH), L.P.N. Development (LPN), Pruksa Holding (PSH), Quality Houses (QH), Supalai (SPALI), Sansiri (SIRI), SC Asset Corporation (SC), and Origin Property (ORI).
According to CGSI, the aggregate normalized profit of these nine companies in 1Q26 is expected to be THB 3.33 billion, representing a sharp decline of 42% quarter-on-quarter but an increase of 4.5% year-on-year. This figure constitutes only 15.8% of CGSI’s full-year profit forecast, leading to the projection that the first quarter will likely be the sector’s weakest-performing quarter in 2026.
The quarter-on-quarter decline in profits is attributed primarily to a slowdown in property transfers and a reduced gross profit margin (GPM) from real estate sales. However, the year-on-year improvement is mainly due to increased real estate revenue and lower selling, general, and administrative expenses (SG&A).
AP, PSH, QH, SIRI, and SC are projected to post year-on-year profit growth, whereas LH, LPN, SPALI, and ORI are expected to report lower normalized profits compared to the same period last year.
CGSI estimates that total real estate sales revenue for the sector in the first quarter of 2026 will reach THB 29.4 billion, a decrease of 33.9% from the previous quarter, as developers accelerated property transfers prior to the end of 2025. Despite this, sales revenue is projected to rise by 8.0% year-on-year, supported mainly by condominium transfer activity.
The sector’s average gross profit margin from real estate sales is expected to stand at 26.9%, down from 29.0% in the fourth quarter of 2025 and 30.2% in the first quarter of 2025. The decline is attributed to aggressive promotional campaigns and discounts aimed at reducing unsold inventory.
CGSI expects GPM to remain under pressure throughout the remainder of the year, with the full-year 2026 figure likely to decrease to 28.6% from 29.4% in 2025, as developers prioritize cash flow management over profitability.
Looking forward, CGSI forecasts that net profits will rebound quarter-on-quarter in the second quarter of 2026, with the fourth quarter set to deliver the sector’s highest earnings of the year. The outlook is supported by significant condominium backlogs, with companies holding substantial pre-sold but untransferred units.
As of the end of 2025, the backlogs of AP, SIRI, SC, SPALI, and ORI to secure 2026 transfers stood at 80.8%, 31%, 33.5%, 29.3%, and 43.6%, respectively, with a large portion comprising condominium projects expected to be handed over within the year.
Additionally, a local media outlet has reported that the Bank of Thailand (BOT) is considering extending the easing of the loan-to-value (LTV) cap, previously set to expire on June 30, 2026. CGSI believes that, should this measure be prolonged, developers focused on mid- to high-end segments will benefit the most, as the policy would enhance purchasing power for buyers in these markets.
CGSI reiterates a ‘Neutral’ rating on the real estate sector, citing persistent macroeconomic challenges that continue to affect residential demand. Nevertheless, dividend yields for 2026-2027 remain attractive. Currently, the sector is trading at only 7.7x projected 2027 P/E, which is -1.12 standard deviations below its five-year average.
The brokerage names AP, SPALI, and SIRI as top picks within the sector, expecting robust earnings rebounds in 2026 with high dividend yields ranging between 6.6% and 10.4%. AP and SIRI are favored for their large backlogs and strong presence in the mid- to high-end segment, while SPALI is expected to see significant profit recovery, particularly in the second half of 2026.
Despite the promising prospects, CGSI points out downside risks for the sector, particularly if macroeconomic uncertainty persists, GDP growth slows, or inflation accelerates due to rising oil prices. Conversely, there are upside risks from potential extension of reduced transfer and mortgage registration fees for homes priced at or below THB 7 million per unit, and further relaxation of LTV rules.
