Home Product Center Public Company Limited (SET: HMPRO) reported a net profit for the second quarter of 2026 at THB 1,594 million, representing growth of 14% year-on-year and 13.5% quarter-on-quarter. This marks the first year-on-year profit growth in five quarters, with the figure slightly outperforming both Finansia Syrus Securities (FSS) and market expectations by 3-4%.
Growth in 2Q26 was mainly driven by a 3.4% year-on-year increase in total revenue, supported by contributions from new store sales and other income, while same-store sales (SSS) remained steady year-on-year. Another key factor was the gross profit margin (GPM), which increased to 27.7%, up from 25.8% in 2Q25, primarily due to higher selling prices and a modest increase in the contribution from the PV brand.
However, part of this growth was offset by an increase in selling, general, and administrative expenses to sales, which rose to 20.6% from 19.5% during the same period last year. This was mainly attributable to higher personnel expenses, increased depreciation, and a low expense base in 2Q25, when some staff costs were reversed.
Overall, net profit for the first half of 2026 accounted for 49% of the full-year estimate, slightly below the 52% proportion seen in 1H25. Nevertheless, downside risk appears limited, as SSS has started to stabilize, according to the brokerage.
For the period of July 1-20, 2026, SSS for both HomePro and Mega Home is estimated to contract by approximately 1-2% year-on-year. The gross profit margin in the second half of 2026 is expected to improve further year-on-year due to ongoing price adjustments, albeit at a more moderate rate.
Finansia maintains its forecast for HMPRO’s full-year 2026 profit to remain flat year-on-year. At present, HMPRO is trading at a valuation that is still at a discount, with an estimated 2026 P/E of 13.8x, compared to the home retail sector average of 16-17x. Therefore, the brokerage continues to recommend a ‘Buy’ rating on HMPRO.
In addition, Finansia maintains its tactical view on the home retail sector, favoring trading strategies for HMPRO (target price at THB 7.70), DOHOME (THB 4.30), and GLOBAL (THB 8.00), based on expected year-on-year earnings growth in the second quarter and second half of 2026, in line with anticipated improvements in gross profit margins.
