TOA Paint (Thailand) Public Company Limited

TOA is adjusting its strategy to push into the economy paint segment, focusing on rental property customers while expanding in construction and repair chemicals, with a target of 5% sales growth in 2026. Chief Executive Officer Jatuphat Tangkaravakoon said the company is now placing more weight on affordable products after focusing on the premium segment since 2000. The economy segment has faster turnover and more frequent repeat usage, with main customers being rental units and public housing projects. The company has a 2026 investment budget of about 600 million baht, of which 197 million baht was spent in the first half, and expects heavy disbursement from late third quarter to early fourth quarter. The spending breaks down into 33.6% for new production capacity, 23.6% for safety and sustainability, 19.5% for machinery replacement, 9.3% for automation, and 14.1% for others. Third quarter gross margin may decline by 1.0 to 1.5 percentage points from 40.2% in the first half due to the weaker baht, while raw material costs are beginning to stabilize. Titanium dioxide prices are trending down, while resin and monomer prices may rise slightly because of Middle East tensions. In overseas markets, Vietnam is expected to keep growing at a double digit pace, Laos growth is limited by its small population, and Cambodia and Myanmar face short term pressure from economic and political conditions but have high long term potential.

Kasikorn Securities said the construction materials group reported combined normalised profit of 2.2 billion baht in the second quarter of 2026, up 11 percent from a year earlier, supported by a higher gross margin despite weak sales. Profit fell 11 percent from the previous quarter due to seasonal demand and more holidays. Combined normalised profit for the first half of 2026 was 4.8 billion baht, up 28 percent from a year earlier, representing 61 percent of the full-year estimate of 7.9 billion baht. Combined revenue in the second quarter of 2026 was 24 billion baht, up 6 percent from a year earlier and 1 percent from the previous quarter. Gross profit margin rose to 28.2 percent, up 0.7 percentage point from a year earlier and 0.3 percentage point from the previous quarter, as higher selling prices fully offset higher oil-linked raw material costs. Such raw materials account for 35 to 45 percent of cost of sales. The selling, general and administrative expense to revenue ratio rose to 17.9 percent, up 0.2 percentage point from a year earlier and 1.8 percentage points from the previous quarter, due to higher logistics costs. As a result, the normalised profit margin rose 0.4 percentage point from a year earlier to 9.4 percent, but fell 1.3 percentage points from the previous quarter. Ceramic tile sales at Dynasty Ceramic and SCG Decor fell 6 percent and 7 percent from a year earlier respectively, because they have a high proportion of revenue from the private sector where demand is weak, while normalised profit fell 4 percent and 5 percent respectively. Tipco Asphalt revenue rose 20 percent from a year earlier on higher asphalt prices following the war between the United States and Iran, lifting normalised profit by 22 percent. TOA Paint sales rose 4 percent on higher market share and inventory stocking, but normalised profit rose only 3 percent because of higher selling, general and administrative expenses and Myanmar-related costs. Eastern Polymer Group delivered the strongest performance, with sales up 9 percent and normalised profit up as much as 43 percent on demand for insulation products in the United States. Kasikorn Securities maintained a neutral view on the sector, focusing on stock selection. It picked Eastern Polymer Group as a top pick with a buy rating and a target price of 6.70 baht, and TOA Paint with a buy rating and a target price of 19.0 baht, because they have stronger demand than other companies. Eastern Polymer Group benefits from strong demand for insulation products in the United States, while TOA Paint's market leadership supports stable paint demand.

TOA Paint Thailand Public Company Limited, or TOA, announced results for the first six months of 2026 with net profit of 1.671 billion baht, up 21 percent from the same period last year, and total revenue of 11.325 billion baht, up 4 percent. In the second half, the company plans to push into the paint market for rental residential properties to expand its customer base and increase usage frequency, while controlling costs and helping customers manage paint inventory. The company declared an interim dividend of 0.38 baht per share, with the stock trading ex-dividend on 27 August 2026 and payment on 11 September 2026. Analysts at Tisco Securities recommend buying with a target price of 19.00 baht.

TOA announced an interim cash dividend of 0.38 baht per share. The board approved the dividend on 13 August 2026, with the record date for shareholders entitled to receive the dividend set for 28 August 2026 and the XD date on 27 August 2026. The dividend is paid from operating results for the period 1 January 2026 to 30 June 2026 and will be paid to ordinary shareholders on 11 September 2026.

Analysts have upgraded their recommendation on TOA from hold to buy, raising the fair value to 17.50 baht from 14.50 baht, after lifting profit forecasts for 2026 to 2028 by 21 percent, 15 percent, and 13 percent respectively, reflecting stronger-than-expected profitability. Net profit for 2026 is projected at 3.227 billion baht, with gross margin holding high at around 39 percent despite rising raw material costs. The full-year dividend is expected to yield about 5 percent. Meanwhile, two other brokers have set targets of 19 baht and 16.10 baht respectively.

Krungsri Securities assesses that TOA Paint Thailand, or TOA, will continue to deliver solid results in the second quarter of 2026. Core profit is expected at 822 million baht, up 6 percent year on year but down 10 percent from the first quarter. Revenue is forecast at 5.6 billion baht, up 5 percent year on year and flat quarter on quarter, helped by an average 4 percent selling price increase and higher sales volumes as trade partners built inventory. Gross margin is projected at 39.0 percent, up from 38.0 percent a year earlier but down from 40.4 percent in the first quarter, with the price hike and volume growth offsetting higher raw material costs, including oil prices, titanium dioxide, and a weaker baht. Krungsri Securities has raised its 2026 and 2027 core profit estimates by an average of 10 percent, forecasting 2026 profit at 2.97 billion baht, down 8 percent year on year, and 2027 profit at 2.96 billion baht, broadly flat. However, cost pressures will become more evident in the second half of 2026, especially in the third quarter, which is the low season, with sales likely to slow. Titanium dioxide prices in the second quarter of 2026 stood at around 2,400 US dollars per tonne, up 20 percent year on year and 21 percent quarter on quarter, as excess supply conditions eased. The broker maintains a Neutral rating and lifts its 2026 target price to 16.10 baht from 14.50 baht.