Company Coverage
CH. Karnchang (CK TB): 2Q26 Results Preview: Earnings To Recover qoq, Supported By Dividend Income Despite Weaker Associate Income
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt18.10
Bt22.00
+21.55%
Bt20.40
Analyst
Highlights
- We expect CK to report a net profit of Bt694m, down 19.6% yoy but up 110.9% qoq.
- A healthy backlog continues to support medium-term revenue visibility.
- Maintain BUY and target price of Bt22.00 (previously Bt20.40).
Analysis
- 2Q26 earnings expected to rise yoy and qoq. CH. Karnchang (CK) is projected to report a 2Q26 net profit of Bt694m, down 19.6% yoy but up 110.0% qoq, primarily due to lower equity income from associates, as CK Power could record a forex loss. Core profit is expected to come in at Bt100m, down 34.0% yoy but up 1.3% qoq.
- Construction revenue up yoy but stable qoq. We expect CK to recognise construction revenue of Bt12.24b in 2Q26, up 0.6% qoq and 14.0% yoy, driven by continued construction progress on key projects, particularly the Orange Line and the Luang Prabang Hydroelectric Power Project. Although no new contracts were signed in 2Q26, the backlog could remain strong at Bt145b.
- Gross margin stable qoq. We expect gross margin to remain stable qoq at 7.4% but decline from 7.9% in 2Q25 due to higher contribution from lower-margin projects. The company indicated that the impact from the Middle East conflict should be limited, with the main effect coming from fuel costs which are expected to be 1-2% (fuel accounts for approximately 8% of COGS). Meanwhile, raw material costs are likely to remain largely unaffected, as prices for several projects have been locked in from the outset. Looking ahead, we foresee 2026 gross margin remaining within management's guidance of 7-8%. Meanwhile, SG&A-to-sales is forecast to remain broadly stable qoq.
- Profit from associates to drop qoq but decline yoy. In 2Q26, we expect CK to recognise equity income from associates of Bt461m from Bangkok Expressway and Metro and CKPower (CKP), up 56.0% yoy but down 22.0% qoq, mainly due to forex losses at CKP resulting from the depreciation of the baht. CK will also recognise a dividend income of Bt232m from TTW in the quarter.
- Potential data centre construction opportunity. Given CK's long track record as one of Thailand's leading contractors, its top 3 market position, and extensive expertise in both civil and system works, we view CK as a potential beneficiary of future data centre construction opportunities. However, participation in such projects is likely to depend on environmental requirements and project economics.
Highlights
- We expect CK to report a net profit of Bt694m, down 19.6% yoy but up 110.9% qoq.
- A healthy backlog continues to support medium-term revenue visibility.
- Maintain BUY and target price of Bt22.00 (previously Bt20.40).
Analysis
- 2Q26 earnings expected to rise yoy and qoq. CH. Karnchang (CK) is projected to report a 2Q26 net profit of Bt694m, down 19.6% yoy but up 110.0% qoq, primarily due to lower equity income from associates, as CK Power could record a forex loss. Core profit is expected to come in at Bt100m, down 34.0% yoy but up 1.3% qoq.
- Construction revenue up yoy but stable qoq. We expect CK to recognise construction revenue of Bt12.24b in 2Q26, up 0.6% qoq and 14.0% yoy, driven by continued construction progress on key projects, particularly the Orange Line and the Luang Prabang Hydroelectric Power Project. Although no new contracts were signed in 2Q26, the backlog could remain strong at Bt145b.
- Gross margin stable qoq. We expect gross margin to remain stable qoq at 7.4% but decline from 7.9% in 2Q25 due to higher contribution from lower-margin projects. The company indicated that the impact from the Middle East conflict should be limited, with the main effect coming from fuel costs which are expected to be 1-2% (fuel accounts for approximately 8% of COGS). Meanwhile, raw material costs are likely to remain largely unaffected, as prices for several projects have been locked in from the outset. Looking ahead, we foresee 2026 gross margin remaining within management's guidance of 7-8%. Meanwhile, SG&A-to-sales is forecast to remain broadly stable qoq.
- Profit from associates to drop qoq but decline yoy. In 2Q26, we expect CK to recognise equity income from associates of Bt461m from Bangkok Expressway and Metro and CKPower (CKP), up 56.0% yoy but down 22.0% qoq, mainly due to forex losses at CKP resulting from the depreciation of the baht. CK will also recognise a dividend income of Bt232m from TTW in the quarter.
- Potential data centre construction opportunity. Given CK's long track record as one of Thailand's leading contractors, its top 3 market position, and extensive expertise in both civil and system works, we view CK as a potential beneficiary of future data centre construction opportunities. However, participation in such projects is likely to depend on environmental requirements and project economics.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt18.10
Bt22.00
+21.55%
Bt20.40
Analyst
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