Stars Microelectronics (Thailand) PCL

Yuanta Securities (Thailand) expects profits of the Thai stock market, or SET Index, in the third quarter of 2026 to come in at about 350 billion baht, up 39% from the same period a year earlier, a level it considers high compared with the historical quarterly profit range of roughly 150-250 billion baht. The main drivers come from the energy and petrochemical sectors after oil prices rebounded sharply by about 44% this quarter, boosting inventory gains for refiners and petrochemical producers. Meanwhile, a stable to weaker baht is a positive for exporters, including electronics components, transport and agricultural goods. A low base in the third quarter of 2025, caused by major flooding and the Thai-Cambodian border problems, is also helping sectors tied to the domestic economy and tourism recover strongly. Of the 20 industry groups analysed, Yuanta expects 17 to post profit growth from a year earlier, two to stay flat, and only commercial banks to see profits slow. If that plays out, SET profits for the first nine months of 2026 will be about 1.1 trillion baht, and the full year 2026 could set a new record high of about 1.4-1.5 trillion baht, growing roughly 30-40% from a year earlier, equivalent to earnings per share of about 112-115 baht, above the Bloomberg Consensus market estimate of 110 baht per share. Yuanta recommends trading for gains in stocks expected to post strong third-quarter 2026 results with profit momentum continuing into 2027, namely GULF, GUNKUL, SSP, EPG, SINGER, SGC, BEM, SMT, TEAM, MINT and CHG.

SMT shares closed the morning session at 6.80 baht, up 0.15 baht or 2.26%, after touching an intraday high of 6.90 baht, supported by three factors. First, positive sentiment in the electronics sector, with DELTA, HANA and KCE leading the market this morning after US employment figures came in below expectations, easing market worries that the Fed will accelerate rate hikes, while US semiconductor stocks surged on Friday night. Second, SMT has its own specific catalyst from its Optical business, which involves optical signal transmission and stands to grow with AI and data centers. Yuanta Securities expects orders from global Optical customers to gradually increase and sees a clearer impact on revenue and margin over the next two quarters. Third, Yuanta expects normal profit in the third quarter of 2026 to grow 65% quarter-on-quarter, and sees 2026 profit swinging from a loss of 146 million baht in 2025 to a profit of 150 million baht. For 2027, it expects profit to grow 88% year-on-year to 282 million baht. It has therefore raised its end-2027 fair value to 8.40 baht and maintained its buy recommendation. The closing price on 2 October already set a new 52-week high at 6.90 baht, while Yuanta's target price of 8.40 baht remains well above the current price.

Yuanta Securities (Thailand) has maintained its Buy rating on Stars Microelectronics (Thailand), or SMT, and raised its end-2570 target price to 8.40 baht per share from 7.60 baht, based on a PER of 25 times, after lifting its 2570 profit forecast on the back of strength in the Optical business. The stock price as of September 30, 2569 stood at 6.05 baht, implying 38.8% upside to the target price. Yuanta's research team expects SMT to post normalized profit of 56 million baht in the third quarter of 2569, up 65% QoQ and a turnaround from a loss of 49 million baht in the third quarter of 2568. If achieved, this would mark a second consecutive quarter of normalized profit following eight straight quarters of losses, and is expected to be the highest profit in three years. Sales revenue in the third quarter of 2569 is expected at 780 million baht, up 10% QoQ and 41% YoY, driven by a recovery in the IC Packaging, PCBA & Box Build, and Optical businesses. Gross margin is expected to rise to 14.6% from 13.0% in the second quarter of 2569 and 1.4% in the third quarter of 2568. SG&A is expected at 69 million baht, flat QoQ and up 11.3% YoY. For the fourth quarter of 2569, the research team expects normalized profit to continue rising both QoQ and YoY on strong orders, particularly in the Optical business, where production for global customers is expected to ramp up gradually. Yuanta maintained its 2569 normalized profit forecast at 150 million baht, a turnaround from a loss of 146 million baht in 2568, and raised its 2570 normalized profit forecast to 282 million baht, up 88% YoY, or an average of about 70 million baht per quarter, from what it said was previously an overly conservative estimate. It expects revenue of 2.67 billion baht in 2569 and 3.204 billion baht in 2570, with EBITDA of 359 million baht and 510 million baht respectively. Core EPS in 2570 is put at 0.34 baht, up 88.1%. Yuanta noted that SMT's valuation remains a laggard, with the stock trading at a 2570 PER of about 18 times, while leading stocks in the sector trade in a range of 27 to 64 times. However, SMT's key risks are its high reliance on a single major customer and volatility tied to the industry cycle.

SMT shares surged 7.63%, or 0.45 baht, to 6.35 baht on trading value of 284.40 million baht, leading the electronics group higher across the board. KCE rose 1.49% to 68.00 baht, HANA gained 1.47% to 51.75 baht, DELTA added 1.19% to 255 baht, and CCET climbed 1.12% to 9.05 baht. Yuanta Securities (Thailand) said Star Microelectronics (Thailand) Public Company Limited, or SMT, posted second-quarter 2026 results that clearly reflect a recovery in revenue, capacity utilisation, and margins. The company guided 2026 revenue of no less than 2.6 billion baht and expects growth of more than 10% in 2027, or above 3 billion baht. It sees Optical and OSAT as new growth engines driven by AI. Although AI-related revenue still accounts for less than 5% of current revenue, it has the potential to rise to at least 10% next year. On valuation, the stock currently trades at a PER of about 19 times, significantly below the group's 28 to 58 times. The broker maintained its end-2027 target price of 7.60 baht per share, based on a PER of 25 times, and kept its 2026 normal profit forecast at 150 million baht, a turnaround from a loss of 146 million baht in 2025, before rising to 256 million baht in 2027, up 70% year on year.

Analysts recommend an investment strategy of trading individual electronics stocks around earnings cycles, highlighting DELTA and SMT as standout plays benefiting from AI and data center technology. Nattapon Kamthakrua, Assistant Managing Director of the Investment Analysis Department at Yuan Ta Securities (Thailand) Company Limited, told Than Hoon that the electronics sector is a group with outstanding profit growth in the Thai stock market, with all five companies under coverage having forward orders spanning roughly one to two production cycles, and he expects the group's third-quarter 2026 results to grow continuously both quarter-on-quarter and year-on-year. DELTA stands out in cooling systems and power-related components, while KCE is expanding into humanoid technology and HANA is focusing on solid state cooling technology for data centers. SMT stands out for its ample remaining production capacity and its chance to swing back to profit after a loss in 2025. However, the P/E of electronics stocks is higher than the SET average of about 15 to 16 times, with DELTA trading at roughly 60 times 2027 earnings, KCE at about 50 times, and SMT at around 19 times. The analysts therefore recommend speculative buying of DELTA, KCE, CCET, and HANA, and a buy on SMT. Meanwhile, Sureeporn Teewasuwet, Assistant Managing Director of the Securities Analysis Department at Finansia Syrus Securities Public Company Limited, told Than Hoon that demand from the AI and data center groups has come in very strong, pushing prices of components, chips, memory, and PCBs higher, and this is expected to benefit the operating results of the three electronics companies under coverage from the third quarter of 2026 through the first half of 2027. DELTA is expected to begin recovering in the third quarter of 2026 both quarter-on-quarter and year-on-year, with a chance of setting a new record high in the fourth quarter of 2026, with a target price of 290 baht. KCE is expected to benefit from a roughly 10% increase in printed circuit board selling prices, fully recognized for a full quarter, with a target price of 61 baht, while HANA has a target price of 53 baht. She also warned investors to watch the risk of more new supply entering the market in the second half of 2027, which if it balances with demand would pressure prices of components, chips, memory, and PCBs downward and drag the electronics group's operating results into a correction in 2028 before returning to a normal growth cycle in 2029.

Yuanta Securities (Thailand) said in an analysis note after visiting the factory of Stars Microelectronics (Thailand), or SMT, that the recovery trend in its business has become clearer, with second-quarter 2026 results reflecting a rebound in revenue, capacity utilisation and margins, and it expects the third and fourth quarters of 2026 to improve significantly on the prior quarter. SMT currently has advance orders covering roughly 8 to 12 months of production and targets 2026 revenue of no less than 2.6 billion baht, while for 2027 it expects growth of more than 10%, or above 3 billion baht. Yuanta views current estimates as based on fairly conservative assumptions and sees upside if orders convert to revenue faster than expected, particularly in wafer dicing, where market supply is constrained. Yuanta sees the Optical business becoming SMT's new growth engine on the back of AI growth, since the Optical and OSAT segments benefit directly from AI infrastructure investment and carry higher margins than the traditional business. Revenue from SMT's AI-related customers is still at an early stage and accounts for less than 5% of total revenue, but has the chance to rise to at least 10% next year. Meanwhile, its collaboration with Lumentum, a major player in the global Optical supply chain, marks an important starting point covering joint investment and development work. Yuanta expects SMT revenue of 2.67 billion baht in 2026, rising to 3.11 billion baht in 2027, and forecasts normalised profit of 150 million baht in 2026, rising to 256 million baht in 2027, or growth of about 70% from the previous year. On 2027 valuation, the stock trades at a PER of about 19 times, still below peers trading at roughly 28 to 58 times. Yuanta maintains its Buy rating on SMT with a target price of 7.60 baht, based on a PER of 25 times, compared with the closing price on 15 September 2026 of 5.85 baht, implying upside of about 29.9%.

The global AI investment wave is driving foreign capital into Thailand's infrastructure sectors, including data centers, power systems, cooling systems, PCB and storage. Data from Kasikorn Thai shows that in the first half of 2026, Thailand received investment promotion applications totaling 1.47 trillion baht, up 37% from a year earlier, while foreign capital rose 80% to 1.36 trillion baht, led by the digital and electronics industries. Among the stocks seen as direct beneficiaries is DELTA, which makes power supply and cooling systems for data centers and is ramping up commercial production of liquid cooling systems. HANA is viewed as the Thai stock market's new AI proxy, with AI-related products set to enter production lines in the second half of 2026. KCE is expected to benefit from the semiconductor upcycle and tight PCB supply, which could support selling prices and profits in the second half of 2026. SMT gains from the shift to optical connectivity, while CCET benefits from rising demand for both HDD and SSD storage as AI computing generates massive volumes of data. INSET has seen a flood of project inquiries, while WHA and AMATA stand to gain because data center businesses use roughly 12 to 16 times more electricity and water than general industrial plants, meaning industrial estate revenue does not end on the day land is sold but continues through long-term utility income. If foreign capital flows and data center investment accelerate further in 2027, the Thai stock market may see an increasingly clear picture of an AI ecosystem.

Kiatnakin Phatra Securities Public Company Limited, or KKP, assesses that global AI investment is moving beyond chips into the surrounding infrastructure, which will create positive ripple effects for the Thai economy, especially the opportunity to attract a new wave of foreign direct investment, or FDI, into the country's industrial sector and advanced technology supply chain. The analysis notes that as AI systems grow larger, power per rack in data centers rises from several tens of kilowatts to about 600 kilowatts and could reach 1 megawatt in the future, shifting the main constraints to power delivery systems, cooling systems, and data transmission. KKP sees two key technologies that will drive the next phase: 800VDC technology and the shift to optical connectivity. KKP expects the new wave of FDI to flow into semiconductors, printed circuit boards, or PCBs, and advanced electronics, estimating that Thailand's major industrial estate developers, WHA and AMATA, will see land sales increase by about 2,500 rai per year and 2,000 rai per year, respectively. For the standout stocks that stand to benefit, KKP states that Delta Electronics (Thailand) Public Company Limited, or DELTA, is ready to serve demand for data center power systems and liquid cooling systems, while Hana Microelectronics Public Company Limited, or HANA, benefits from demand for analog ICs and power semiconductors. KCE Electronics Public Company Limited, or KCE, is ready to serve demand for high-end PCBs, and Stars Microelectronics (Thailand) Public Company Limited, or SMT, benefits directly from the shift to optical connectivity technology. Cal-Comp Electronics (Thailand) Public Company Limited, or CCET, has the potential to serve demand for both HDD and SSD storage devices. Beyond the electronics group, KKP states that AI's expansion also benefits energy infrastructure, as a global shortage of large power transformers bodes well for Thirai Public Company Limited, or TRT, while demand for transformer oil and fluids for liquid cooling systems opens opportunities for P.S.P. Specialties Public Company Limited, or PSP, as well as the strategic partnership of Millennium Group Corporation (Asia) Public Company Limited, or MGC, in developing humanoid robots. Supapong Iamkong-aek, an analyst at Kiatnakin Phatra Securities Public Company Limited, said global AI investment will not stop at software or chips but is spreading to areas where Thailand has good cost advantages, namely infrastructure and downstream industries, which is a window of opportunity that remains wide open for the Thai economy.

Electronics stocks rallied sharply yesterday after second-quarter 2026 earnings came in better than expected, led by HANA Microelectronics, which jumped 22.01% to 48.50 baht on turnover of 5.46 billion baht. CCET rose 5.14% to close at 9.20 baht, while Delta Electronics Thailand gained 2.59% to close at 277 baht. Analysts at Bualuang Securities said HANA's core profit beat market expectations by 20-40% at around 270-280 million baht, while KCE Electronics beat by 15-20% and CCET beat by 10%. Yuanta Securities sees the sector's earnings still in an upcycle, favouring Stars Microelectronics Thailand most as a laggard with a target price of 7.60 baht, and CCET with a target of 10 baht. It also set target prices of 48.50 baht per share for both HANA and KCE.

Yuanta Securities stated that Stars Microelectronics Thailand, or SMT, is seeing a continued recovery in its operating performance in the second half of 2026, with the Optics business as the main driver due to rising demand from AI and data center investments. Normalized profit in the second quarter of 2026 was 34 million baht, reflecting a recovery across all business segments, especially Optics, which has long-term orders from several global customers worth hundreds of millions of baht. The company plans to expand production capacity in the fourth quarter of 2026 to accommodate increasing orders and targets revenue growth of more than 20 percent per year in the medium term. The research team maintains a preliminary fair value range at the end of 2027 of 7.60 to 8.20 baht per share, based on a price-to-earnings ratio of 25 to 27 times, and forecasts normalized profit of 149 million baht in 2026, rising to 256 million baht in 2027.

Stars Microelectronics Thailand Public Company Limited, or SMT, expects profit in the second half of 2026 to roughly double from the first half, with full-year revenue potentially reaching around 2.6 billion baht, up about 29 percent from the previous year, driven by still-strong orders across all business segments, especially Optics and IC/OSAT. Management said demand continues to grow in every segment, and the company is increasingly benefiting from the expansion of the AI industry, with Photonics currently the standout business. The medium- to long-term target for 2027 to 2029 is average revenue growth of more than 10 percent CAGR, while management has an internal goal of 20 to 30 percent growth. The main risk factor remains raw material shortages, particularly wafers, which affect the entire industry. The company has therefore increased raw material reserves, which may cause cash at the end of the second quarter of 2026 to drop to around 46 million baht. However, management said that as of July, cash had returned to about 150 million baht after receiving customer payments, and they remain confident that liquidity is at a good level. Regarding higher raw material costs, the company said it can fully pass the cost burden on to customers, as customers understand the industry-wide raw material shortage situation. Meanwhile, consignment sales in the OSAT and Optics segments may be partially affected by wafer shortages where customers supply the wafers, causing some revenue to be deferred to the second half of 2026. The PCBA business remains turnkey, with the company sourcing all raw materials itself. The company expects gross margins to gradually recover from higher capacity utilization and a weaker baht, targeting a return to around 20 percent, a level achieved in the past. On investment plans, SMT disclosed a total budget of about 550 to 620 million baht for 2026 to 2028, split into roughly 100 to 120 million baht for upgrading existing machinery and about 450 to 500 million baht for new capacity expansion, with potential support from the Board of Investment. In the fourth quarter of 2026, the company will install additional machinery for the Optics business to support rising orders. The company also unveiled its technological roadmap: in 2026, it will focus on advanced packaging such as high-speed chip assembly, expanding Photonics wafer processing capacity, and wafer-level testing systems, before moving to 2.5D hybrid photonics in 2027 and advanced integration technologies including co-packaged optics and wafer-level integration from 2028 onward, to support long-term growth in AI and data centers. In summary, management still sees second-half 2026 profit trends recovering from the first half, with potential for further growth in the third and fourth quarters from strong orders and AI-related business expansion, despite risks from raw material shortages, especially wafers. Meanwhile, SMT shares have been placed under cash balance measures by the stock exchange from August 10 to 28, 2026.

The Trade Policy and Strategy Office of the Ministry of Commerce reported that Thai exports in June 2026 reached 34.66 billion dollars, up 20.8 percent from the same month last year, extending growth for a 24th consecutive month and exceeding market expectations of 13.7 to 15.2 percent. Meanwhile, imports totaled 41.19 billion dollars, rising 50.3 percent, resulting in a June trade deficit of 6.53 billion dollars. For the first half of the year, exports amounted to 196.74 billion dollars, up 17.6 percent, and imports reached 228.49 billion dollars, up 38.0 percent, leading to a cumulative trade deficit of 31.74 billion dollars. Analysts at Yuanta Securities noted that the stronger-than-expected exports and the deficit are factors weighing on the currency, and highlighted five stock groups poised to benefit: rubber, which returned to growth of 12.5 percent after 14 months, supporting STA, NER, and TEGH; processed chicken, supporting GFPT, TFG, and CPF; pet food, which continued to grow 22.3 percent for a tenth straight month, supporting ITC and AAI; canned seafood, which resumed expansion at 17.5 percent, supporting TU; and electronic components, which accelerated growth, supporting SMT, CCET, KCE, and HANA.

Electronics stocks moved higher across the board this morning, supported by a weaker baht and the technology and AI investment trend. At 10:41 a.m., DELTA was at 306.00 baht, up 0.66 percent; KCE at 42.00 baht, up 0.60 percent; HANA at 39.25 baht, up 0.64 percent; SMT at 4.80 baht, up 1.69 percent; and CCET at 9.10 baht, up 0.55 percent. Yuanta Securities noted that the persistently weaker baht is positive for exporters, and the electronic components industry is showing signs of recovery. HANA is supported by Texas Instruments' better-than-expected earnings, while DELTA benefits from Google increasing its AI investment budget. Meanwhile, KCE's target price has been raised to 48.50 baht on expectations that earnings have passed their trough, and SMT remains a stock of interest due to its earnings turnaround potential.

Dao Securities Thailand expects the SET index to move sideways today, with resistance at 1,658 to 1,663 points and support at 1,642 to 1,648 points. Although foreign fund flows may slow after 13 consecutive trading days of net buying, the positive mood from a global tech stock recovery and rising crude oil prices will support the energy sector and cushion the index. Second-quarter 2026 earnings for the banking sector were strong, with combined profit reaching 55 billion baht, led by Kiatnakin Phatra Bank which posted standout profit growth, while Kasikornbank and TMBThanachart Bank delivered stable results and attractive dividend policies. The investment strategy focuses on selective buying in bank stocks, upstream energy, and construction and industrial estate plays, with PLANB and SMT highlighted as top technical picks.

Asia Plus Securities research reports that four major Chinese technology and automotive companies are preparing to expand investments in Thailand worth a combined 70 billion baht this year, focusing on two future industries: AI and data center technology, where Innolight Technology and Eoptolink Technology will expand production bases for optical transceivers to support AI and cloud data center growth, and the electric vehicle industry, where Xiaomi Corporation is considering setting up an EV production base and research and development center in Thailand, while Changan Automobile is moving ahead with expanding production capacity from 100,000 to 200,000 units per year by 2030, along with establishing a regional headquarters and an EV R&D center. Stocks expected to benefit include industrial estate groups such as AMATA, WHA, ROJNA, and PIN; automotive groups such as AH, SAT, and STANLY; parts groups such as HANA, DELTA, KCE, and SMT; and energy groups such as GULF.

Four major technology and automotive companies from China are preparing to expand their investments in Thailand, totaling 70 billion baht within this year, focusing on the electric vehicle industry and AI and data center technology, according to a report by Asia Plus Securities. In the EV sector, Xiaomi Corporation is considering expanding its EV production base and establishing a research and development center in Thailand, while Changan Automobile is moving forward with expanding production capacity from 100,000 to 200,000 units per year by 2030, along with setting up a regional headquarters and an EV R&D center. In the AI and data center group, Innolight Technology is preparing to build a third factory in Saraburi province to expand production of optical modules, and Eoptolink Technology is preparing to expand production capacity at its factories in Chonburi and Rayong. Stocks expected to benefit include industrial estate groups such as Amata, WHA, Rojana, and Pin, automotive groups such as AAPICO Hitech, Somboon Advance Technology, and Stanley Electric, component groups such as Hana Microelectronics, Delta Electronics, KCE Electronics, and Stars Microelectronics, and energy groups such as Gulf Energy Development.