CLSA expects SCG Packaging Public Company Limited (SET: SCGP) to report a third quarter 2026 profit of THB 1.96 billion, marking a robust 106% increase year-on-year but a 15% decline quarter-on-quarter. This comes despite moderate top-line expansion, as third-quarter sales revenue is projected to rise 2% QoQ and 8% YoY, attributed mainly to higher selling prices stemming from cost increases.
Packaging demand showed mixed regional performances—remaining soft in Thailand, but strengthening in Vietnam and Indonesia, with stable conditions in China. Notably, sales volume is anticipated to remain flat QoQ despite typical third-quarter seasonality.
Testliner paper prices edged up from $406/ton in 2Q26 to $409/ton in 3Q26, buoyed by resilient ASEAN demand and rising costs. Meanwhile, AOCC prices climbed from $169/ton to $183/ton over the same period, narrowing the paper spread from $237/ton to $226/ton—a margin effect likely to be more visible in 4Q26 due to price adjustment lags.
The fibrous chain stands to benefit from consistent food-service packaging demand, though printing and writing paper is expected to remain weak. SCGP’s EBITDA margin is forecast to soften to 17%, down one percentage point from the previous quarter.
Fajar, SCGP’s Indonesian subsidiary, is expected to post a stronger net profit of THB 250 million in 3Q26, a 25% QoQ increase, aided by higher prices and improved margin management. SCGP has raised selling prices in Indonesia and continues to optimize its product mix for better margins, despite higher energy costs.
Management remains optimistic for a sales volume rebound in 4Q26 due to restocking ahead of the festive season, although year-end holidays and some delivery delays caused by flooding in Thailand could temper gains. SCGP is prepared to lift prices further if energy costs escalate.
Looking ahead, SCGP plans to finalize a minor merger or partnership deal in 4Q26. CLSA maintains an ‘Outperform’ rating and DCF-based target price of THB 35.00 per share, equivalent to a 2026 P/E of 17.7x.
