CLSA Securities anticipates a strong turnaround for SCG Packaging Public Company Limited (SET: SCGP) in the second quarter of 2026, projecting a net profit of THB 2.2 billion—a 40% quarter-on-quarter and an impressive 117% year-on-year increase. The boost in performance is underpinned by improving sales volume and higher margins in both the packaging paper and fibrous chain segments, with regional demand on the rise.
The company benefits from rising testliner paper prices, up from $385 per ton in 1Q26 to $406 in 2Q26, and similar increases in American Old Corrugated Containers (AOCC) prices, reaching $168 per ton. Despite pressure from higher coal and freight costs, SCGP successfully raised prices to offset these increases. Additionally, prices for short fibre and dissolving pulp have surged, aided by robust textile demand as high oil prices pushed producers toward substitutes like dissolving pulp.
Operational efficiency also improved, with overall plant utilisation expected to climb from 85% in the first quarter to 90% in the second quarter of 2026. SCGP’s Fajar operation in Indonesia is projected to post its first positive bottom line since the Covid-19 pandemic, contributing a forecasted profit of THB 150 million in 2Q26 compared to a THB 40 million loss the previous quarter.
Looking ahead, SCGP expects solid performance to continue in the third quarter, supported by ASEAN stimulus programs and a steady recovery in Thailand. Although oil prices are softening, product prices are likely to lag, temporarily preserving margins—an additional tailwind for consumption and tourism in the second half of 2026.
CLSA notes that SCGP is negotiating two mergers and partnership (M&P) deals, which if concluded in the second half, could boost earnings further. Adjustments for lower AOCC prices lift 2026 – 2028 earnings forecasts by 16 – 18%, prompting an upward revision of the target price from THB 28 to THB 35 per share, with a maintained “Outperform” rating.
