Flood-repair demand hopes lift DCC, but weak tile sales still weigh
Q2 profit and tile volumes fell DCC's second-quarter profit slipped 3.86% to 220.71 million baht and tile sales volume dropped 13.6%, as Thailand's economy recovered only slowly. Higher prices lifted margins, but fewer tiles sold means weaker core demand, which pressures the shares.
It is the company's own latest earnings, the fundamental backdrop for the stock.
Weak private-sector construction demand Kasikorn Securities said ceramic tile sales at DCC and SCG Decor each fell about 6-7% because both rely on private-sector customers, where demand is weak. Brokers stayed neutral on the sector, so there is no broad upgrade pushing building-material stocks up.
It explains the weak demand behind DCC's falling volumes and the sector's cautious view.
Brokers pick DCC for post-flood repairs After late-September floods hit Bangkok homes, InnovestX, GBS, Asia Plus and Finansia Syrus all named DCC among stocks likely to gain from home repair and renovation demand for floor and wall tiles. Asia Plus put consensus fair value at 1.51 baht.
This is the main new force lifting DCC: expected repair demand after the floods.
Flood damage seen limited, not 2011-scale Brokers estimate flood damage at only 20-40 billion baht, about 0.1-0.2% of GDP, since industrial estates were spared. That supports a repair-demand boost for DCC, but if water lingers beyond a few days, weaker consumer spending could offset the gain.
It gives the counterweight: the repair boost is real but the overall economic hit is modest.