Equity Analysis /
Thailand

Dohome: Building scale fast

  • Building market share

  • The short-term earnings outlook is soft …

  • …but the 2022-24 profit growth profile is strong

Chalinee Congmuang
Chalinee Congmuang

Equity Research Analyst

Bualuang Securities
20 June 2022

We have initiated coverage on DOHOME with a BUY call to a DCF-derived YE22 target price of Bt20.50. The firm’s relatively small size enables it to scale up fast, building market share at the expense of traditional trade. Our model points to solid 2022-24 CAGRs of 20% for sales and 17% for core earnings (versus Home Improvement/ Construction Retail peer means of 11% and 13%, respectively).

Building market share

Growing from its home base in the Northeast, DOHOME is both a retailer and wholesaler (selling to resellers) of construction supplies and home décor items. Historical data show a 2013-21 sales CAGR of 9% (versus industry growth of about 2%). DOHOME is growing from a much smaller base than either HMPRO or GLOBAL. It is aggressively building its store network and (unlike HMPRO or GLOBAL) is also a wholesaler and deals directly with small and mid-sized contractors (ticket sizes of up to Bt10m), so we expect market share expansion for years into the future.