Company Coverage
Stecon Group (STECON TB): 2Q26 Results Preview: Earnings Supported By GULF Dividend And Improving Construction Activities
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt17.90
Bt20.00
11.75%
Bt10.80
Analyst
Analyst
Panjarat Thaweesriprasert
Highlights
- We expect STECON to post a net profit of Bt896m, rising 74.8% yoy and 155.4% qoq.
- Revenue from construction is likely to continue growing while dividend from GULF should drive the bottom line in 2Q26.
- Maintain BUY with a target price of Bt20.00 (previously Bt10.80).
Analysis
- Earnings to increase yoy and qoq. We expect Stecon Group (STECON) to report a net profit of Bt896m, up 74.8% yoy and 155.4% qoq. The increase is mainly driven by dividend income from Gulf Energy Development (GULF), totalling Bt736m. Excluding dividend income and equity income, we expect STECON to report a core profit of Bt187m (+79.6% yoy, +7.8% qoq).
- Revenue likely to improve yoy and qoq. Construction revenue is forecast to increase 5.2% yoy and 27.1% qoq, supported by ongoing projects. Meanwhile, revenue from sales and services is expected to reach Bt62m, up 20.0% yoy and 4.0% qoq. Total revenue should come in at Bt9.23b (+5.3% yoy, +26.8% qoq).
- 2Q26 gross margin should remain in line with the target of above 7%. We expect gross margin to decline qoq to 7.3% in 2Q26, mainly due to the impact of higher fuel prices. Nevertheless, we forecast 2026 gross margin at 7.36%, in line with the company's guidance of no less than 7.0%. Meanwhile, supported by better cost control, we expect SG&A-to-sales to improve to around 3.4%, down from 4.2% in 2Q25 and 4.1% in 1Q26.
- Dividend from GULF to support earnings. STECON held approximately 226.54m shares or 1.52% of total GULF shares before the ex-dividend date, ranking as the 13th-largest major shareholder. Based on GULF's dividend of Bt3.25 per share, we foresee STECON recognising dividend income of approximately Bt736m in 2Q26. Meanwhile, equity income is expected to remain relatively stable qoq, with a share of loss of around Bt30m.
- Good momentum to continue in 2H26. We expect STECON to remain on track to achieve its new order target of Bt50b, supported by a healthy project pipeline in 2H26. The company remains positive on the outlook, driven by contributions from public sector projects. We believe STECON is well positioned to meet its new order target, with several major projects likely to be put out for bid in 2H26, including the M5 and M9 motorways, the M82 O&M contract, and the Kratu-Patong Expressway, all of which have received cabinet approval, alongside additional bidding opportunities from private sector projects.
Highlights
- We expect STECON to post a net profit of Bt896m, rising 74.8% yoy and 155.4% qoq.
- Revenue from construction is likely to continue growing while dividend from GULF should drive the bottom line in 2Q26.
- Maintain BUY with a target price of Bt20.00 (previously Bt10.80).
Analysis
- Earnings to increase yoy and qoq. We expect Stecon Group (STECON) to report a net profit of Bt896m, up 74.8% yoy and 155.4% qoq. The increase is mainly driven by dividend income from Gulf Energy Development (GULF), totalling Bt736m. Excluding dividend income and equity income, we expect STECON to report a core profit of Bt187m (+79.6% yoy, +7.8% qoq).
- Revenue likely to improve yoy and qoq. Construction revenue is forecast to increase 5.2% yoy and 27.1% qoq, supported by ongoing projects. Meanwhile, revenue from sales and services is expected to reach Bt62m, up 20.0% yoy and 4.0% qoq. Total revenue should come in at Bt9.23b (+5.3% yoy, +26.8% qoq).
- 2Q26 gross margin should remain in line with the target of above 7%. We expect gross margin to decline qoq to 7.3% in 2Q26, mainly due to the impact of higher fuel prices. Nevertheless, we forecast 2026 gross margin at 7.36%, in line with the company's guidance of no less than 7.0%. Meanwhile, supported by better cost control, we expect SG&A-to-sales to improve to around 3.4%, down from 4.2% in 2Q25 and 4.1% in 1Q26.
- Dividend from GULF to support earnings. STECON held approximately 226.54m shares or 1.52% of total GULF shares before the ex-dividend date, ranking as the 13th-largest major shareholder. Based on GULF's dividend of Bt3.25 per share, we foresee STECON recognising dividend income of approximately Bt736m in 2Q26. Meanwhile, equity income is expected to remain relatively stable qoq, with a share of loss of around Bt30m.
- Good momentum to continue in 2H26. We expect STECON to remain on track to achieve its new order target of Bt50b, supported by a healthy project pipeline in 2H26. The company remains positive on the outlook, driven by contributions from public sector projects. We believe STECON is well positioned to meet its new order target, with several major projects likely to be put out for bid in 2H26, including the M5 and M9 motorways, the M82 O&M contract, and the Kratu-Patong Expressway, all of which have received cabinet approval, alongside additional bidding opportunities from private sector projects.
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt17.90
Bt20.00
11.75%
Bt10.80
Analyst
Analyst
Panjarat Thaweesriprasert
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
