Equity Analysis /
Thailand

SCG Packaging PCL: Start repacking!

  • 2Q22 looks set to be an uninspiring quarter, but ...

  • ... cost pressure to alleviate…

  • …margin improvement expected for 2H22

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Follow
Bualuang Securities
1 July 2022

SCGP’s share price underperformance in 2022YTD has been priced into the 1H22 uninspiring outlook, we think. This offers a good opportunity to accumulate the stock, premised on the firm’s 2H22 favorable prospects, buoyed by growing demand and margin expansion. We are pleased to offer investors insights from SCGP’s management delivered at our Thai Corporate Day today.

2Q22 looks set to be an uninspiring quarter, but ...

The economic reopening of Thailand and other ASEAN countries as well as UK and US (new markets for food service packaging products) continued to boost demand for packaging paper, packaging products (Integrated Packaging Chain business), and pulp (Fibrous Chain business) through 2Q22. Hence, we expect 2Q22 sales volume to rise YoY. Meanwhile, the sales volume may be relatively stable QoQ, as stronger demand in Vietnam, Philippines, and Malaysia will tend to offset seasonally low demand for packaging in Thailand and Indonesia.