CH. Karnchang PCL

Construction stocks rose, led by STECON and CK, after second-quarter 2026 results came in better than market expectations. STECON gained 4.40% to 19.00 baht on turnover of 519.31 million baht, while CK added 3.65% to 19.90 baht on turnover of 269.33 million baht. Kasikorn Securities said STECON posted normalised profit of 910 million baht in the second quarter of 2026, up 374% from a year earlier and 488% from the previous quarter, slightly above expectations. Its backlog stood at 114 billion baht, supporting revenue for about three years, with new work expected to accelerate in the second half of 2026 to support a new-work target of 50 billion baht. Kasikorn Securities maintained a buy rating with a target price of 20.62 baht. Meanwhile, Pi Securities kept a buy rating on CK, saying second-quarter 2026 net profit beat expectations at 800 million baht, prompting it to raise full-year 2026 profit by 5% to 2.237 billion baht. It maintained revenue at 44.803 billion baht and assessed fair value at 23.1 baht. CK had a backlog of 146.305 billion baht at the end of the first half of 2026 and targets new work of more than 249 billion baht from large government projects in the future.

Finansia Syrus Securities says Ch. Karnchang, or CK, has a chance to deliver 2026 revenue above its 40 billion baht target, helped by progress on the Orange Line rail project, while a pipeline of large state projects worth about 198 billion baht is expected to open for bidding from late this year into early next year. Third-quarter 2026 profit is expected to recover from the previous quarter, supported by profit contributions from BEM and CKP entering their high season, though it should still fall from a year earlier because of a high base. The broker keeps its 2026 normalized profit forecast at 9 percent below last year and maintains a buy rating with a target price of 23 baht.

Ch. Karnchang Public Company Limited, or CK, reported second-quarter results for fiscal 2026 in line with plan, with profit exceeding 800 million baht, supported by a stable construction revenue base, cost management, and growing share of profit from investments. The company currently has a backlog of 146.3 billion baht, which will be gradually recognised as revenue over the next three to four years, while continuing to add new projects to its portfolio. Managing Director Nattavut Trivisvavet said the company is ready to bid for government construction projects, especially large-scale infrastructure projects, to maintain its backlog at a level that supports growth and delivers good returns to shareholders.

The Office of the National Economic and Social Development Council reported that gross domestic product in the second quarter of 2026 expanded 1.9% from a year earlier, slowing from 2.8% in the first quarter but above the market forecast of 1.7%. The main support came from private investment, which grew strongly in line with investment promotion applications, while private consumption slowed to 1.9% from 3.3% in the previous quarter amid higher domestic energy prices, and government spending was weak because disbursement had already been accelerated earlier. Yuanta Securities expects consumption to recover clearly in the third quarter from the full-quarter impact of the Thai Chuay Thai Plus measures, and government spending to accelerate toward the end of the fiscal year. It maintains a positive view on construction contractors, power plants, industrial estates, retail, and food and beverage, citing stocks CK, STECON, GUNKUL, GULF, FORTH, SAMART, EPG, BJC, CPALL and CBG. The planning agency also raised its GDP forecast for this year to 2.0 to 2.5% from 1.5 to 2.5%, and lowered its inflation forecast to 1.5 to 2.0% from 2.0 to 3.0%, which helps ease pressure on monetary policy tightening.

Bualuang Securities released its review of the financial statements of 11 companies, finding that 8 reported better-than-expected profits: GUNKUL, CK, SPRC, CPF, CBG, AWC, HANA, and BCH. STECON and BH posted profits in line with expectations, while BTS reported a smaller loss than expected. GUNKUL posted core profit of 567 million baht, 7% above expectations. CK posted core profit of 800 million baht, 17% above expectations, and announced an interim dividend of 0.20 baht per share. SPRC posted core profit of 7.09 billion baht, 11% above expectations, and announced a first-half dividend of 0.50 baht per share. CPF posted core profit of 4.57 billion baht, 13% above market expectations. CBG posted core profit of 736 million baht, 13% above expectations. AWC posted core profit of 232 million baht, above expectations. HANA posted core profit of 278 million baht, 25% above expectations. BCH posted core profit of 343 million baht, 13% above expectations, and announced an interim dividend of 0.15 baht per share. STECON posted core profit of 910 million baht, in line with expectations. BH posted core profit of 1.89 billion baht, in line with expectations, and announced an interim dividend of 4 baht per share. BTS reported a core loss of 601 million baht, smaller than the slight profit originally expected.

Dao Securities stated that Ch. Karnchang Public Company Limited, or CK, reported second-quarter 2026 net profit of 800 million baht, down 7% from a year earlier but up 143% from the previous quarter, exceeding market and Dao forecasts by 17-18%. The result was supported by construction revenue rising 6% year-on-year, with gross margin expanding more than expected by 20 basis points from a year earlier and 70 basis points from the previous quarter, thanks to internal cost management efficiency. Other income slowed 25% year-on-year, mainly because CK Power posted foreign exchange losses, but rose 87% from the previous quarter on higher TTW dividends and a larger share of profit from BEM. Interest expenses fell more than expected as loans were gradually repaid. Dao maintained its 2026 normalized profit forecast at 2.5 billion baht, up 2% from a year earlier, and expects third-quarter 2026 normalized profit to grow both year-on-year and quarter-on-quarter, driven by continued construction revenue growth, easing interest expenses, and the peak season for CK Power. Dao kept its buy recommendation and target price of 23.00 baht, based on a sum-of-the-parts valuation comprising 3.6 baht for the construction business and 19.4 baht for the combined value of its stakes in BEM, CK Power, and TTW. Although the backlog is gradually declining, it still helps secure revenue for the next three years, and there are additional catalysts from the Double Deck project worth 35 billion baht and the government's push for new projects.

Kasikorn Securities maintains buy ratings on CK and STECON, expecting strong second-quarter 2026 earnings and opportunities to secure major projects in the second half of the year. For CK, normalized profit is forecast at 725.7 million baht, down 1 percent from a year earlier but up 120.5 percent from the previous quarter. For STECON, normalized profit is forecast at 888.4 million baht, up 362.5 percent from a year earlier and 473.7 percent from the previous quarter. Excluding dividend income after tax, STECON's normalized operating profit is expected to be 225.8 million baht, up 17.6 percent from the same period last year and up 46 percent from the previous quarter. The target price for CK is 27.98 baht and for STECON 20.62 baht.

Analysts assess the second-quarter 2026 earnings outlook for four companies in the CH. Karnchang Group. CK is expected to post a normalised profit of 725.7 million baht, down 1% from a year earlier but up 120.5% from the previous quarter, supported by construction operating profit accelerating 11.5% year-on-year. BEM is forecast to report a normalised profit of 1.01 billion baht, up 1.5% from a year earlier and 15.2% from the previous quarter, thanks to lower financial costs. CKP is seen posting a normalised profit of 202 million baht, down 43% from a year earlier but up 74% from the previous quarter, as it enters the high season in the third quarter. Meanwhile, TTW is expected to report a net profit of 686 million baht, down 14% from a year earlier but up 2% from the previous quarter, standing out as a defensive stock with steady cash flow and high dividend payouts.

InnovestX Securities states that the signing of an MOU extending the employment period for over four million Myanmar workers in Thailand by another five years will help unlock the most critical labour bottleneck for Thailand's labour-intensive industrial sector. It also aims to push bilateral trade value to 12 billion US dollars, up from around 7.4 billion dollars, through accelerating border checkpoint restoration, using local currency payment systems, and promoting infrastructure investment, especially the Dawei Special Economic Zone project. However, risks remain from Western sanctions that could pressure the valuation of stocks with concessions or direct investment linked to the Myanmar military government. For short-term investment strategy, the firm recommends speculative trading based on news factors for beneficiary stocks, divided into two themes: groups directly benefiting from more stable labour cost management, such as CK, STECON, GFPT, BTG, CPF, and groups benefiting from a recovering border trade atmosphere, such as MEGA, TNP, CBG, OSP, CHG, BCH.

Dao Securities Thailand forecasts that Ch. Karnchang, or CK, will post a net profit of approximately 678 million baht in the second quarter of 2026, down 21 percent from the same period last year but up 106 percent from the previous quarter, reflecting a recovery driven by progress on large-scale construction projects and lower financial costs. Construction revenue is expected to rise 13 percent year-on-year, supported by the Orange Line electric train project and the Luang Prabang hydropower plant project. The backlog awaiting revenue recognition is estimated at around 140 billion baht, down from 190 billion baht in the second quarter of 2025 and 160 billion baht in the first quarter of 2026, but remains a key future revenue base. Gross margin is forecast at 7.4 percent, down from 7.9 percent a year earlier, while selling and administrative expenses to sales are expected at 4.8 percent, down from 5 percent a year ago. Other income is projected to decline 29 percent year-on-year due to lower profit contributions from CK Power, or CKP, but increase 77 percent from the prior quarter, thanks to dividend income from TTW and seasonally stronger profit contributions from CKP, as well as dividends from Bangkok Expressway and Metro, or BEM. Interest expenses are expected to fall 26 percent year-on-year and 3 percent quarter-on-quarter after the company gradually repaid loans. Dao Securities maintains its 2026 normalized profit forecast at 2.5 billion baht, up 2 percent from the previous year, and expects third-quarter 2026 profit to grow both year-on-year and quarter-on-quarter, driven by higher construction revenue, a lower interest base, and a favorable seasonal pattern for CKP. Near-term catalysts include progress on the Double Deck project, mechanical and electrical systems work for the Purple Line South project, and the opening of new government project bids. Dao Securities reiterates a buy rating on CK with a target price of 23.00 baht per share.

Phillip Securities Thailand forecasts CK's Q2 2026 profit at 663 million baht, up 101.6% from the previous quarter, driven by a seasonal recovery in profit sharing from BEM and dividends from TTW, but down 23.1% year-on-year due to lower foreign exchange gains at CKP. Construction revenue was stable at around 12 billion baht from the prior quarter and grew from a year earlier, supported by progress on the Orange Line West rail project, the Luang Prabang power plant project, and the Den Chai–Chiang Khong double-track railway. The construction gross margin is expected at 7.5%, still within the 7-8% target range despite higher oil prices, reflecting effective cost management, while interest expenses declined due to gradual debt repayment. The profit trend has potential for continued growth into Q3 2026, following CKP's seasonal factors. Phillip Securities upgraded CK from accumulate to buy, with a target price of 21.60 baht, viewing that earnings have passed their trough and are likely to recover steadily through the rest of the year.

Analysts at Yuanta Securities Thailand, or YUANTA, say the formation of five working groups under the Joint Public-Private Sector Consultative Committee, or Krung-Or, will boost money circulating in the economy by as much as 600 billion to 800 billion baht per year if the country's investment ratio can be lifted from the current 22 to 23 percent to 30 percent of gross domestic product as targeted. The plan is divided into three phases: a short-term phase of six months, a medium-term phase of two years, and a long-term phase of four years, covering strategies in investment, artificial intelligence and digital technology, the green economy, finance, and healthcare. Stocks expected to benefit directly include GULF, GUNKUL, KTB, STECON, CK, FORTH, SKY, PIS, DITTO, SAMART, and TASCO, especially power-plant operators and companies likely to win project work from the public sector. Analysts recommend closely monitoring progress in the first six months, because if the plan is executed as scheduled it will help restore confidence and support long-term earnings growth.

Kasikorn Securities says the government is pressing ahead with infrastructure development under the Missing Link plan, accelerating the upgrade of Ranong Port and building a Chumphon–Ranong railway to establish a trade gateway on the Andaman coast, alongside developing the economic hinterland behind the port. The research team views this as positive for construction contractors and industrial estates, namely STECON, CK, AMATA and WHA, if the projects are pushed forward concretely.

TTB Wealth Securities maintains a Buy rating on Ch. Karnchang Public Company Limited, or CK, but lowers its target price to 22.50 baht from 23.00 baht after trimming the sum-of-the-parts valuation of its investment in CKP. This reduces CK’s earnings estimates for 2026–2028 by 1–4 percent. However, the firm still views CK as one of the key beneficiaries of Thailand’s new infrastructure investment cycle, with earnings expected to grow at an average of 9 percent per year during 2027–2029 and upside of 20.3 percent from the target price. The research team notes that although earnings estimates have been cut due to the impact on CKP, in which CK holds a 30 percent stake, the fundamentals of the construction business remain strong, supported by a backlog of 157 billion baht at the end of the first quarter of 2026, equivalent to about 3.4 times 2026 revenue. This is coupled with opportunities to win new work from the double-deck expressway project worth 35 billion baht and the southern Purple Line rail system worth 27 billion baht, as well as dividend income and profit sharing from CKP, BEM, and TTW of around 2.7 to 2.9 billion baht per year. The company expects to maintain a gross margin of 8.3 percent through advance procurement of construction materials. In addition, TTB Wealth sees CK as one of the biggest beneficiaries from the bidding for government infrastructure projects during 2026–2028, with a combined value of approximately 775 billion baht, covering highways, double-track railways, high-speed rail, and airports. Although some projects may be delayed by government processes, bidding is still expected to begin gradually from late 2026 onwards. For near-term performance, the research team expects CK to post a net profit of 843 million baht in the second quarter of 2026, down 2 percent year-on-year but up 156 percent quarter-on-quarter. The sequential growth is driven by higher dividend income from TTW and increased profit sharing from associates, while the construction margin is expected to remain stable from the previous year. TTB Wealth forecasts CK’s revenue at 45.823 billion baht and net profit at 2.606 billion baht in 2026, rising to 2.738 billion baht in 2027 and 2.973 billion baht in 2028, reflecting the gradual recognition of revenue from the backlog and new projects expected in the coming years.

Kasikorn Securities holds a positive view on the Thai economy after the Ministry of Finance raised its 2026 economic growth forecast to 2.5% from 1.6%. A key factor is private investment, which is expected to expand by as much as 9%, driven by projects receiving investment promotion from the Board of Investment, especially in data center businesses. This has led to outstanding growth in machinery and equipment investment. The Office of the National Economic and Social Development Council is scheduled to announce second-quarter 2026 GDP figures on August 17, 2026. Kasikorn Securities expects investment to be the most prominent growth engine compared with other economic components, and this may prompt several research houses, including Kasikorn Securities, to raise their GDP forecasts going forward. Currently, Kasikorn Securities maintains its 2026 GDP forecast at 2.0%, seeing room for upward revisions in private consumption at 2.2% and investment at 4.5%. Meanwhile, the export sector continues to show better-than-expected trends, though the positive impact may be partially offset by expanding imports. For investment strategy, Kasikorn Securities remains positive on stocks related to investment and infrastructure, namely Krung Thai Bank, Gulf Energy Development, WHA Utilities and Power, CH. Karnchang, and Bangkok Expressway and Metro.