Summary · why it matters
CGS International (Thailand), or CGSI, has upgraded DOHOME, Siam Global House, or GLOBAL, and Home Product Center, or HMPRO, from Sell to Buy, and raised its investment weighting for the Thai retail sector from Neutral to Overweight, after seeing clearer signs of a demand recovery. The latest residential low-rise building permit data has returned to growth, with permitted construction area rising 10.6% year on year in the first quarter of 2026 after 11 consecutive quarters of contraction, and up another 7.7% in the second quarter of 2026. This suggests sales of home improvement products are likely to recover in the fourth quarter of 2026 and in 2027. CGSI said same-store sales growth at DOHOME in July and August, mostly sales of construction materials to contractors, project customers and wholesalers, has strengthened its confidence that the rise in construction plans is translating into real demand, and it expects same-store sales growth through that channel to remain in the high single digits in September even without the low-base boost from last year's steel shortage. CGSI views this as the clearest signal of a recovery in demand for home improvement products in three years. The stock CGSI finds most attractive is DOHOME, which it expects to be among the first to benefit from the demand recovery, as construction materials account for nearly 50% of sales in the first half of 2026, while about 35% of sales come from the northeastern region, where applications for low-rise residential building permits rose about 20% year on year in both the first and second quarters of 2026, according to the Real Estate Information Center, or REIC. GLOBAL has construction materials at about 35% of sales and a similar share of sales in the northeast to DOHOME, but its northern sales, about 25% to 30% of the total, still face declining building permit applications. HMPRO is expected to recover gradually along with consumption, supported by a dividend yield forecast at 5.5% in 2027. On earnings, CGSI raised its combined net profit forecasts for the three companies by 1.0% to 3.6% for 2026 to 2028 after lifting sales and margin assumptions for some companies and cutting financial cost forecasts, saying earnings and share price estimates could be revised up further if residential building permit applications keep growing, contractor sales continue to expand even without the low-base boost, and demand for construction materials and home decoration products recovers broadly. Risks that could weigh on this view include delays in construction after permits are granted, slower sales growth once the low-base effect fades, continued declines in household spending, and margins coming under more pressure than expected.
Dohome Public Company Limited
Siam Global House Public Company Limited
Home Product Center Public Company Limited