Thailand: Siam Cement suffers market dip

Thailand: Siam Cement suffers market dip
Published: 21 October 2014

Tagged Under: Thailand Consumption Siam Cement 

Thai domestic cement demand dipped around three per cent YoY in 3Q14, as no new infrastructure projects broke ground during 9M14, while many old projects were completed, claims the Nation paper. The weaker demand probably squeezed the ex-factory price by THB25-50/t QoQ to THB1925-1950/t  (US$59.60/t to US$60.40/t) in 3Q14, which would be flat YoY.

Sales of building materials in Thailand are likely to have declined by as much as eight per cent YoY in 3Q14, due to weak consumption, particularly in the north.

Forecasters at the Nation expect the cement and building materials division of Siam Cement Co (SCC) to post a profit of around THB3.3bn, down by 35 per cent YoY and five per cent QoQ. Excluding a non-recurring gain of THB1.65bn in 3Q13, the division's core profit fall would be 12 per cent YoY.

The Nation believes the share price underperformance has already factored in the expected weak 3Q14 profit. As such, now should be a good time to reinvest in SCC, ahead of robust earnings growth in FY15-16, driven by improving domestic cement demand and new cement capacity.