ILM: Hold for Dividends, Await Purchasing Power Recovery

Analyst
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Krungsri Securities Public Company Limited has issued a NEUTRAL recommendation for Index Living Mall Public Company Limited, or ILM, with a 2027 target price of 14.20 baht per share. The view is that the stock is suitable for holding to collect dividends rather than expecting share price appreciation, as earnings growth remains limited due to weak consumer purchasing power. The research team forecasts normalised profit for 2026 at 776 million baht, up 3 percent from the previous year, and for 2027 at 794 million baht, a further 2 percent growth. Revenue in 2026 is expected to rise only 2 percent, while same-store sales are flat and gross margin remains strong at around 47.4 percent. However, the expansion of small-format stores, particularly the Flying Tiger brand, which targets an increase from 6 branches at the end of 2025 to 18 branches in 2026, will add to expenses and limit near-term profit growth, even though Flying Tiger products carry high margins and help improve the product mix over the long term. For the second quarter of 2026, normalised profit is estimated at approximately 190 million baht, up 8 percent year-on-year and 2 percent quarter-on-quarter, supported by same-store sales growth of 3 percent after the Hat Yai branch resumed full operations and the Ubon Ratchathani branch gained additional selling space. However, the recovery remains weaker than other home improvement peers. ILM's key attraction is its dividend yield, trading at 2026 and 2027 price-to-earnings ratios of just 8.3 times and 8.1 times, below historical levels, with an expected annual dividend of 1.00 baht per share, implying a dividend yield of approximately 7.8 to 8.0 percent.

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