Equity Analysis /
Thailand

SCG Packaging PCL: Margin up-trending

  • Consumer-linked segments demand sustaining strong in 3Q22

  • Easing cost elements...

  • …margin is on the uptrend

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

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Bualuang Securities
8 September 2022

The firm’s uninspiring 1H22 performance is behind us.  SCGP’s 2H22 prospects look more favorable, buoyed by strong consumer-linked demand and margin expansion. Moreover, there is a scope for upside to our forecasts and valuation from new investments/acquisitions.

Consumer-linked segments demand sustaining strong in 3Q22

The economic reopening of Thailand and other ASEAN countries as well as UK and US (new markets for food service packaging products) has continued to boost demand for packaging products and pulp through 3Q22. Despite concerns that a potential global economic slowdown has adversely affected the demand for discretionary goods/durable goods, the demand for F&B and FMCG (consumer-linked products) has sustained resilient regardless. As the consumer-linked segments accounted for 73% of SCGP’s total revenue in 1H22, this should continue to support its sales of packaging products in 3Q22. Also, the third-quarter normally sees a seasonally high demand for packaging products, boosting sales volume this period.