Highlights

• AP reported a net profit of Bt1.063b in 2Q26, around 4% higher than our and market consensus estimates. 
   
• Gross profit margin was higher than expected due to a better product mix; however, lower-than-expected JV income and costs offset the positive
  impact. 
   
• 3Q26 transfers and margin are expected to accelerate during the peak season. 
   
• We upgrade AP to BUY from HOLD with a higher target price of Bt9.45. 

Analysis

• AP reported a net profit of Bt1.063b in 2Q26, around 4% higher than our and market consensus estimates. AP (Thailand) (AP) reported a net profit 
  of Bt1.063b (+17.7% yoy, +5.7% qoq), slightly higher than our and market consensus by 4.2% and 3.4% respectively. This compares with our forecast
  of Bt1.020b and market consensus of Bt1.028b. 
   
• Revenue from transfers totalled Bt10.506b in 2Q26, in line with our and market consensus. Revenue from transfers totalled Bt10.506b in 2Q26
  (+8.4% yoy, +13.2% qoq), in line with our and market consensus. The company continued to deliver resilient earnings growth even against a high
  base of property transfers in 2Q25. This growth was particularly prominent in high-rise transfers with AP having secured over 81% of its full-year 
  condominium revenue target for 2026. The qoq increase in transfers follows normal seasonality while AP managed to grow yoy despite a high-based 
  transfer in 2Q25.  

• Gross profit margin is higher than expected due to better product mix. Gross profit margin came in at 30.9% in 2Q26, exceeding our expectation of
  30.2% and market expectation of 30.3% (vs 29.6 % in 1Q26 and 30.7% in 2Q25). This is largely similar to 1Q26 despite pricing pressure from a better
  product mix of high-rise condominium projects despite the promotional campaigns, amid tight mortgage lending conditions.  
   
• Lower-than-expected JV income and costs offset the positive impact. SG&A-to-revenue improved qoq to 17.5% but dropped yoy. However, the
  share of profit from JVs decreased both yoy and qoq to Bt14m (vs Bt48m in 1Q26 and Bt86m in 2Q25). This was due to an absence of new JV condos
  in 1H26, which offset the impact of an improved gross profit margin. A slightly higher corporate income tax — typically paid in 2Q — offsets the benefits
  gained from the higher gross margins. 
   
• 3Q26 outlook. AP guided that 3Q26 will be the peak season with 17 project launches worth over Bt17.900b, mainly driven by new project launches in
  upcountry market, particularly five Apitown projects. In addition, ownership transfers from major JV projects like Rhythm will contribute to 3Q26’s results. Supported by a product mix from accelerated new project launches, overall gross profit margin is expected to remain stable and recover to the 30% level.