Siam City Cement Public Company Limited

An analysis of the construction contractor sector by Asia Plus Securities indicates that the passage of the annual budget expenditure bill for fiscal year 2027, worth 3.788 trillion baht, marks the start of a new round of accelerated public investment, with investment spending reaching approximately 789 billion baht, or 20.8% of the total budget. Meanwhile, the Ministry of Transport is preparing to push forward a total of 262 investment projects covering roads, railways, electric trains, ports, and airports. Local budgets of nearly 395 billion baht will help increase construction and maintenance work in the regions. The brokerage views the construction contractor group as the most direct beneficiary and assesses that Ch. Karnchang Public Company Limited, or CK, and STECON Group Public Company Limited, or STECON, are the most closely linked to the acceleration of budget disbursement. It recommends "Buy" on CK with a fair value of 24 baht and "Buy" on STECON with a fair value of 23 baht. For the construction materials group, it views SCC, SCCC, and TASCO as beneficiaries, with TASCO set to gain support from budgets for road and highway network maintenance. Meanwhile, Pi Securities has a consistent view, saying it is beginning to see positive signals for a new round of government auctions. Since the start of 2026, CK has signed new work that is largely additional work from existing projects worth only about 870 million baht, causing its backlog to fall from more than 168 billion baht early in the year to about 146 billion baht at the end of the first half of 2026. However, the direction of new work has become clearer after the Cabinet resolved on September 1, 2026, to approve the continuation of three double-track railway projects with a combined value of more than 106 billion baht, comprising the Chumphon-Surat Thani section worth 36.892 billion baht, the Surat Thani-Hat Yai Junction section worth 61.534 billion baht, and the Hat Yai Junction-Padang Besar section worth 8.371 billion baht. Bidding is expected to open in early 2027. These projects are part of Phase 2 of the double-track railway program, which has six projects in total. Pi Securities views the opening of bidding for double-track railway projects worth more than 100 billion baht as an opportunity for CK to bid for all of them, expecting the three projects to be divided into about five contracts. If it wins new work, this would be upside to Pi Securities' 2027 revenue forecast of 42.134 billion baht, since the forecast does not yet include the new work to come. In addition, CK has the opportunity to win two other large projects related to Bangkok Expressway and Metro Public Company Limited, or BEM: the installation of systems for the Purple Line South electric train, worth approximately 30 billion baht, and the Double Deck expressway project, worth approximately 35 billion baht. Pi Securities maintains its "Buy" recommendation on CK with a fair value of 23.10 baht, based on 1.3 times its 2026 book value.

InnovestX Securities has assessed three possible outcomes for tomorrow's US Federal Reserve meeting, after US August inflation figures came in close to expectations. The Consumer Price Index stood at 3.4% year-on-year, unchanged from the previous month, while Core CPI slowed from 2.5% to 2.4% year-on-year. However, the month-on-month figures came in slightly above expectations, and the overall inflation level remains above the Fed's target, keeping the market concerned about the interest rate path. The first scenario is a hold, which is the base case, but the market assigns it only about 10% probability, while nearly 90% expect a rate hike. The second scenario is a single Dovish Hike with no signal of further increases, which could pressure the SET to pull back in the short term before building a base. The third scenario is a Hawkish Hike with a signal of further increases, in which case the Dot Plot must be watched to see whether it reflects a higher rate path for next year. For Thai equity portfolios, InnovestX recommends two defensive themes for low-risk investors. The first is a Domestic Play, focusing on big-cap stocks with domestic revenue, such as CPALL, CPN, CRC, BDMS, BCH, PR9 and CHG. The second is a High Dividend Play, stocks expected to deliver a consistent dividend yield above 5% per year, namely BBL, KTB, HMPRO, AP, SCCC, PTT, FTREIT and LHSC. For investors with a high risk appetite, the firm recommends a Tactical strategy based on the meeting outcome. If the Fed holds rates, it sees a Risk-on play in MTC, SAWAD, TIDLOR, AP, SIRI, DELTA, HANA and KCE. If it is a Dovish Hike, it recommends buying on dips. If it is a Hawkish Hike, it recommends raising cash holdings and waiting for a market correction over roughly three to six months before considering groups that benefit from high interest rates and a weak baht, namely BBL, KBANK, KTB, TLI, BLA, TU and ITC.

InnovestX Securities Company Limited expects the Thai stock market to remain volatile and has unveiled four standout stock themes to navigate the SET Index falling below 1,600 points. It estimates support at 1,580 and 1,575 points, with resistance at 1,605 and 1,610 points, and recommends a Selective Buy strategy focused on accumulating shares as prices decline. The first theme covers defensive stocks and high-dividend stocks expected to deliver consistent dividend yields above 5% per year, namely BBL, KTB, HMPRO, AP, SCCC and PTT. The second theme covers stocks benefiting from global economic factors and high bond yields. In the energy group it picks PTTEP, BCP, TOP and SPRC, while in shipping it selects PSL and TTA. High bond yields are a positive factor for banks, namely KTB, BBL and KBANK, as well as life insurers BLA and TLI, after the yield on 10-year US Treasury bonds rose to 5% for the first time in nearly three years. The third theme covers stocks benefiting from government policy, namely GULF, GUNKUL, AMATA and WHA, on progress with the draft PDP2026 plan and policies supporting rooftop solar, while STECON, CK and SCCC fall in the construction and construction materials group. As for economic stimulus measures, CPALL, CPAXT and BJC are seen benefiting from the extension of the Thai Chai Thai Plus program, while CPALL, CRC, ERW, CENTEL and AOT are supported by the Thai Tiew Thai Plus program. DELTA, HANA and KCE fall under the theme of promoting investment in data centers and artificial intelligence. The final theme covers laggard stocks, namely AP, PR9, SAWAD, HMPRO, BDMS, TU, BCH, MTC and TIDLOR, whose second-half 2026 earnings are expected to grow both year on year and compared with the first half of the year.

The Cabinet has approved the second phase of the southern dual-track railway project, comprising three routes with a total investment of 106,798.32 million baht. Bidding is expected to open between late 2026 and early 2027. Brokers view that CH. Karnchang (CK) will benefit the most, given its expertise in large-scale state infrastructure projects, and is expected to secure at least 27,000 million baht in contracts, while STECON is expected to secure around 21,000 million baht. The three routes include: Chumphon–Surat Thani (36,892.32 million baht), Surat Thani–Hat Yai Junction (61,534.55 million baht), and Hat Yai Junction–Padang Besar (8,371.45 million baht). The government will bear all costs. This approval will bolster CK's backlog and provide upside to its share price from the current target of 23 baht. Other construction contractors such as ITD, UNIQ, and NWR also have opportunities to participate in the bidding, while construction material companies like SCC, SCCC, and TASCO will benefit from increased demand for cement and steel.

The mobile Cabinet meeting in Songkhla Province, scheduled for August 31 to September 1, 2026, is set to consider several large-scale projects that could generate investment in the South for years to come, especially the second phase of the Southern dual-track railway with a total budget of approximately 104.466 billion baht, covering three routes with a combined distance of 534 kilometers: Chumphon–Surat Thani (30.423 billion baht), Surat Thani–Hat Yai Junction–Songkhla (66.271 billion baht), and Hat Yai Junction–Padang Besar (7.773 billion baht). If approved, this will connect the rail network from the lower central region to the Malaysian border, reduce logistics costs, and enhance long-term economic potential. Stocks expected to benefit include construction contractors such as CK, STECON, ITD, UNIQ, and NWR, as well as construction material companies like SCC, SCCC, and TASCO. Additionally, there are proposals from five southern provinces totaling 199 projects with an initial budget of over 57 billion baht, which could support water management and utility stocks such as FLE, UBA, and WIIK, as well as tourism and retail groups like AOT, AAV, CENTEL, ERW, SHR, CPALL, and CRC. However, most benefits are medium to long term and depend on actual approvals and bidding. Furthermore, there are projects for the Songkhla Lake Bridge and the Lanta Island Bridge with a combined budget of approximately 6.7 billion baht, expected to be completed by 2029, but the main contractor is a foreign company, CHEC Construction (M) Sdn Bhd, so Thai stocks may only get subcontracting work or domestic material procurement. Investors should monitor approval resolutions, funding sources, contract divisions, and actual work secured by each company, as these are key factors determining the impact on profits.

Siam City Cement Public Company Limited, or SCCC, reported a second-quarter 2026 net profit of 1.3 billion baht, down 9 percent from the previous quarter but up 31 percent from a year earlier, supported by its cement businesses in Thailand and Vietnam as well as its energy operations in both coal and alternative fuels. The company also announced an interim dividend for the first half of 2026 of 4.00 baht per share, representing a dividend yield of 2.6 percent, with the XD date on 18 August and payment on 3 September. Yuanta Securities' research team noted that first-half profit accounted for 66 percent of its full-year estimate of 4 billion baht, creating potential for an upward revision, and maintained a buy recommendation with a fair value of 185.00 baht, expecting the stock to react positively in the near term on the strong results and dividend.

Siam City Cement Public Company Limited, or SCCC, reported a second-quarter net profit of 1.25 billion baht, up 30.64% from the same period last year, driven by a strong cement business and a 3.6% increase in net sales revenue. Total EBITDA rose 14.3%, with the EBITDA margin improving to 26.7%. The ready-mixed concrete business saw revenue increase 33.7%, but EBITDA fell 2.0% due to temporarily higher costs. The Conwood business staged a strong recovery, with EBITDA surging 133.3% after restructuring to reduce fixed costs, while the LANNA business posted a 36.1% increase in EBITDA on higher coal prices. The board approved an interim dividend of 4.00 baht per share, with the XD date set for 18 August 2026 and payment on 3 September 2026.