KGI Securities (Thailand) said in an analysis that it expects NEO to report third-quarter 2026 net profit of 234 million baht, up 298% year on year and 12% quarter on quarter. The strong year-on-year growth is expected to be driven by higher sales, better gross margin and a lower SG&A-to-sales ratio, while the quarter-on-quarter growth is expected to be driven by higher sales and a lower SG&A-to-sales ratio as well. If profit meets expectations, first-nine-month 2026 profit will be 538 million baht, up 36% year on year, accounting for 83% of analysts' full-year profit estimate. NEO's third-quarter 2026 sales are estimated to be a record high, growing 21% year on year and 4% quarter on quarter to 3.2 billion baht, driven by full-quarter recognition of the positive impact of the government's Thai Chai Thai Plus scheme, the success of new product development and the relaunch of existing products, as well as a price increase of about 4-5% from July 2026 onward. GPM in the third quarter of 2026 is expected to improve to 38.2%, up 1.2 points year on year but down 0.2 points quarter on quarter, on a more appropriate product mix. The SG&A-to-sales ratio is expected to fall to 28.5%, down 5.2 points year on year and 0.9 points quarter on quarter, mainly due to lower expenses related to NPD, as the company launched 35 SKUs of new products in the third quarter of 2026, compared with 97 SKUs in the third quarter of 2025 and 46 SKUs in the second quarter of 2026. Analysts maintain their 2026 profit estimate at 648 million baht, up 15% year on year, and their 2027 estimate at 729 million baht, up 13% year on year. They see fourth-quarter 2026 sales growing year on year on the remaining period of the co-payment scheme, but likely slowing quarter on quarter from the high third-quarter base and weaker demand due to the impact of flooding. In terms of GPM, it may fall quarter on quarter from full-quarter recognition of depreciation from the new factory. Overall, fourth-quarter 2026 profit is expected to decline both year on year and quarter on quarter. The analyst gives a 2027 target price of 26.70 baht, based on the previous PE of 11 times. The share price has already risen about 14% in the past four weeks, reflecting that the market has largely priced in the expected strong third-quarter 2026 results, leaving limited upside to the target price. The investment recommendation on NEO is therefore downgraded to only "hold" from "buy."
Neo Corporate PclKGI expects NEO's Q3 2026 net profit to jump 298% YoY to 234 million baht on higher sales, better gross margin and lower SG&A ratio.
