Summary · why it matters
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.
CH. Karnchang PCL
Bangkok Expressway and Metro Public Company Limited
Tipco Asphalt Public Company Limited
Siam City Cement Public Company Limited
STECON Group Public Company Limited
The Siam Cement Public Company Limited