Siam Cement stock rating upgraded by CLSA as operations turn around

CLSA upgraded Siam Cement PCL (SCC) to Outperform from Hold, raising its price target to THB250.00, citing a significantly improving operational outlook. The Thai conglomerate reported a robust Q2 2025 profit of THB17.3 billion, a substantial increase from THB1.1 billion in Q1, with underlying profit (excluding extraordinary items) nearly tripling quarter-on-quarter to THB3.1 billion and exceeding CLSA's estimates by 28%. This strong performance was driven by better chemical spreads and a 3% year-over-year rise in cement demand, with the upcoming restart of its Long Son Petrochemical complex in late August expected to further bolster its operational turnaround.

Analysis

CLSA has upgraded Siam Cement PCL (SCC) to Outperform from Hold, substantially raising its price target from THB150.00 to THB250.00, signaling strong confidence in the company's operational turnaround. This upgrade is underpinned by a robust second-quarter 2025 performance, where reported profit surged to THB17.3 billion from THB1.1 billion in the prior quarter. More significantly, the core profit, excluding extraordinary items, reached THB3.1 billion, nearly tripling on a quarter-over-quarter basis and surpassing CLSA's estimate by a notable 28%. The performance was driven by fundamental improvements, including better chemical spreads and a 3% year-over-year increase in cement demand. The outlook is further supported by a key operational catalyst: the planned restart of the Long Son Petrochemical complex at the end of August, which is expected to reinforce the positive trajectory.

Key Decisions for Investors

• The significant Q2 core profit beat of 28% against analyst estimates, coupled with the CLSA upgrade, serves as a strong signal of an operational turnaround, suggesting the positive revision in outlook is well-founded.
• Investors should monitor the successful restart of the Long Son Petrochemical complex in late August as a key near-term catalyst that could drive further earnings upside in the second half of the year.
• Given the improving fundamentals in both chemical and cement segments and the substantial price target increase, investors may consider the stock a compelling cyclical recovery play.