CK rated Buy with target of 22.50 baht, earnings seen growing 9% on average in 2027–2029

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TTB Wealth Securities maintains a Buy rating on Ch. Karnchang Public Company Limited, or CK, but lowers its target price to 22.50 baht from 23.00 baht after trimming the sum-of-the-parts valuation of its investment in CKP. This reduces CK’s earnings estimates for 2026–2028 by 1–4 percent. However, the firm still views CK as one of the key beneficiaries of Thailand’s new infrastructure investment cycle, with earnings expected to grow at an average of 9 percent per year during 2027–2029 and upside of 20.3 percent from the target price. The research team notes that although earnings estimates have been cut due to the impact on CKP, in which CK holds a 30 percent stake, the fundamentals of the construction business remain strong, supported by a backlog of 157 billion baht at the end of the first quarter of 2026, equivalent to about 3.4 times 2026 revenue. This is coupled with opportunities to win new work from the double-deck expressway project worth 35 billion baht and the southern Purple Line rail system worth 27 billion baht, as well as dividend income and profit sharing from CKP, BEM, and TTW of around 2.7 to 2.9 billion baht per year. The company expects to maintain a gross margin of 8.3 percent through advance procurement of construction materials. In addition, TTB Wealth sees CK as one of the biggest beneficiaries from the bidding for government infrastructure projects during 2026–2028, with a combined value of approximately 775 billion baht, covering highways, double-track railways, high-speed rail, and airports. Although some projects may be delayed by government processes, bidding is still expected to begin gradually from late 2026 onwards. For near-term performance, the research team expects CK to post a net profit of 843 million baht in the second quarter of 2026, down 2 percent year-on-year but up 156 percent quarter-on-quarter. The sequential growth is driven by higher dividend income from TTW and increased profit sharing from associates, while the construction margin is expected to remain stable from the previous year. TTB Wealth forecasts CK’s revenue at 45.823 billion baht and net profit at 2.606 billion baht in 2026, rising to 2.738 billion baht in 2027 and 2.973 billion baht in 2028, reflecting the gradual recognition of revenue from the backlog and new projects expected in the coming years.

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Analyst maintains Buy rating with target price, citing strong backlog and infrastructure cycle.

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