SCGP shares, or SCG Packaging Public Company Limited, continued to rise by 1.71% to 29.75 baht, after Tisco Securities Company Limited maintained its "Buy" recommendation and increased the fair value to 40 baht per share from 36 baht, based on an EV/EBITDA ratio of 10.8 times for 2027, in line with the company's historical average. The research department raised its profit forecasts for 2026-2028 by 9.3%, 9.1%, and 9.6%, respectively, after adjusting assumptions for packaging paper prices and profit margins. Despite concerns over rising imported recycled paper costs (RCP) and declining short-fiber pulp prices, the research department believes SCGP can still manage, as packaging paper prices continue to rise. The regional benchmark price in the third quarter of 2026 increased by 1.2% from the previous quarter, following a 5% increase in the second quarter of 2026. Meanwhile, domestic recycled paper prices, which account for 60-65% of raw material costs, fell by 10% in Thailand, significantly offsetting cost pressures. The pulp business is less concerning, as SCGP has adjusted its production mix to increase dissolving pulp, whose prices remain strong, and China's new capacity of 2.2 million tons per year is mostly integrated production, not all entering the market directly. While the stock price has risen 15% in three months, compared to the SET's decline of 0.7%, it still trades at an EV/EBITDA of around 7.7 times for 2027, below its historical average, and the research department's 2026 profit forecast is 8% higher than the market's.
SCG Packaging Public Company LimitedTisco maintains Buy and raises SCGP's fair value to 40 baht from 36, lifting profit forecasts on higher packaging paper prices and margins.
