Thai 2Q26 Earnings: A Sixth Straight Beat

Thai listed companies have posted their sixth consecutive quarter of earnings beats, with aggregate net profit for a 179-stock coverage universe reaching Bt341 billion in 2Q26. This represents an 11% year-on-year increase and a 15% quarter-on-quarter rise, landing 12% above Bloomberg consensus estimates. Of the 135 stocks previewed, 39% beat expectations, 42% were in line, and 19% missed. First-half earnings now stand at 58% of full-year forecasts, indicating a comfortable run-rate. However, the aggregate figure masks significant sector-specific variations. Key contributors to the positive surprise included energy (+17% vs forecast), construction materials (+40%), transportation (+2%), agribusiness & food (+2%), finance (+2%), and banks (+4%). Construction materials significantly surpassed consensus by 35%, while energy beat by 16%. On the other hand, the electronics sector missed by 31%, with DELTA being a primary drag. Asset management also underperformed, missing by 18%. While media, construction materials, infrastructure funds, industrial estates, property, energy, packaging, and petrochemicals posted strong results against expectations, electronics and asset management faced headwinds. A notable turnaround was seen in the petrochemicals sector, which swung from a Bt6.3 billion loss in 2Q25 to a Bt21.1 billion profit in 2Q26. This "loss to profit" move was a significant contributor to quarterly growth. Despite this, 2026 forecasts were cut by 7.5%, suggesting the recovery is largely base-effect driven. IVL is a company to watch in this space. The electronics sector, despite real earnings growth of 38% YoY and 47% QoQ, saw its 2026 forecasts cut by 8.9% due to higher-than-anticipated expectations. Asset management earnings collapsed 76% YoY, missing consensus by a substantial 37%. Looking ahead, the current earnings beats are expected to create genuine upside risk to consensus SET forecasts. An estimated Bt70-85 billion in additional earnings could lift the 2026 SET EPS forecast from Bt99 to Bt105-107, implying a trading range of 1,680-1,710 points, up from the current target of 1,620. This scenario is driven by earnings delivery rather than multiple expansion. For 3Q26, earnings momentum is projected to improve further, fueled by domestic recovery, government stimulus, tourism, and investment. Sector preferences for the latter half of the year include electronics, property, and healthcare, with HANA, SPALI, and BCH named as top picks. Key risks remain the usual macro trio: Middle East tensions, energy price volatility, and US economic data influencing Federal Reserve policy. In summary, the aggregate earnings beat is real but not broad-based, primarily driven by a low-base recovery in energy and petrochemicals, with construction materials as a standout performer. The upside case to 1,680-1,710 points hinges on continued domestic recovery, but it is crucial to monitor whether the strength in energy and petrochemicals is sustainable or a one-off event. Source: ThaiCapitalist