KGI initiates coverage on SCC with Buy rating, 305 baht target, betting on strong profit recovery

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KGI Securities (Thailand) Public Company Limited, or KGI, has initiated coverage on Siam Cement Public Company Limited, or SCC, with a Buy rating and a 2027 sum-of-the-parts target price of 305 baht per share, based on blended EV/EBITDA and P/E. It views the current valuation as still below historical averages and those of its peer group. KGI said SCC is in a period of structural transition, having previously relied mainly on its petrochemical business. In 2021, core profit peaked at around 47 billion baht, with the chemicals business accounting for roughly 60%, before profit fell to about 5 billion baht in 2025 on weaker product spreads and operating costs from the LSP project. In the first half of 2026, the share of EBITDA from the chemicals business fell to about 36% from 45% in 2021, while SCG Packaging Public Company Limited, or SCGP, and the Cement-Building Materials business, or CBM, which includes SCG Decor Public Company Limited, or SCGD, together saw their share of EBITDA rise to 55% from 49%. KGI expects SCC's core profit in 2026-2028 to grow 287%, 7% and 27% from the previous year, respectively, with its 2027-2028 estimates about 14% and 10% above the market consensus, respectively. It estimates SCC's annual CAPEX will fall to about 30 billion baht from around 61 billion baht previously, which should accelerate debt reduction and increase dividend-paying capacity. It also estimates a bull case of 381 baht per share and a bear case of 117 baht per share.

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