On Wednesday at 3:18 PM (Bangkok time), the share price of KCE Electronics Public Company Limited (SET: KCE) jumped by 5.65% or THB 1.75 to THB 32.75, with a trading value of THB 1.79 billion.
Land and Houses Securities (LHS) noted that KCE reported a net profit of THB 234 million for 1Q26, a significant increase of 90% quarter-on-quarter and 2% year-on-year. This result exceeded expectations by 50%, largely due to higher foreign exchange gains. The company’s normalized profit was THB 181 million, up 29% quarter-on-quarter and 3% year-on-year, surpassing estimates by 15%.
These strong results are attributed to improved utilization rates following the completion of production line upgrades and robust growth in orders for high-margin HDI PCBs, which led to better-than-expected gross profit margins, despite some ongoing cost pressures. Additionally, selling, general, and administrative (SG&A) expenses were lower than anticipated as employee benefit expenses decreased.
Following these, the analyst gives a ‘Speculative Buy’ recommendation for KCE.
Finansia Syrus Securities (FSS) commented that KCE’s first-quarter 2026 normalized profit exceeded expectations primarily due to lower-than-forecast expenses. The company posted a net profit of THB 234 million, up 90% quarter-on-quarter and 1.9% year-on-year. Excluding foreign exchange gains and other special items, normalized profit was THB 181 million, up nearly 30% quarter-on-quarter and marginally year-on-year.
FSS highlighted a 13.6% quarter-on-quarter and 9% year-on-year reduction in total expenses, credited partly to the absence of customer compensation costs seen in the prior quarter. This led to the SG&A-to-sales ratio dropping to 12%, compared to 14.3% in the previous quarter.
Total revenue was $98.8 million, up 4.8% quarter-on-quarter and 0.5% year-on-year, with PCB revenue at $83.1 million, increasing 12.7% quarter-on-quarter and showing recovery in all regions except China, which saw a substantial decline both quarter-on-quarter and year-on-year due to increased competition and pricing pressures. Gross profit margin remained subdued at 17.7%, below Finansia’s estimate but slightly above the figure from a year prior.
The brokerage pointed out that rising copper costs had only a moderate impact in the first quarter, thanks to successful supplier negotiations, but the effect is expected to grow in the coming quarters as new, higher-priced raw materials are used. KCE is closely managing costs and inventory and is expected to start adjusting selling prices in line with overall market trends for PCBs.
