BrokerTH
Q1 2026 earnings season in Thailand has produced a clearer picture than expected. Several sectors beat broker expectations, supporting the SET’s mid-May rally from 1,489 to 1,539. The standouts: petrochemicals, telecommunications, financials, and selected tourism-linked names. The disappointments: small-cap tech and some retail.
Petrochemicals — the cleanest beat
SCC (Siam Cement), PTTGC, and IVL (Indorama Ventures) all delivered Q1 numbers above broker consensus. The driver was product spreads — the gap between feedstock costs and finished product prices — widening through the quarter. PTTGC reported a meaningful sequential improvement in petrochemical margins, while IVL benefited from improved PET pricing globally.
The rally hasn’t fully priced in the improvement. P/E ratios on the three sit at 12-14x forward, well below the SET average. For investors betting on continued global recovery and stable energy markets (a meaningful “if” given Iran tensions), the sector remains attractively valued.
Telecommunications — operational improvement
TRUE and AIS both reported better-than-expected Q1 results. TRUE in particular showed meaningful EBITDA improvement after the merger integration with DTAC settles in. AIS continued its consistent execution on enterprise and 5G monetization.
The investment case: Thai telcos are now structurally a two-player market after the TRUE-DTAC merger, with rational pricing and limited new competition. That supports cash flow visibility and dividend yields that beat most other SET sectors.
Financials — strong but with caveats
Major Thai banks reported solid Q1 numbers, with several beating on net interest income and credit cost. The caveat: the BOT’s 1% policy rate caps net interest margin expansion, and credit growth has been modest. Banks are profitable but not growing fast.
For income-focused investors, KBANK, SCB, and BBL all offer 4-6% dividend yields with reasonable payout sustainability. Capital adequacy is strong, NPLs are manageable, and the banks have weathered the COVID and Iran-era shocks better than many regional peers.
Tourism-linked recovery
Airports of Thailand (AOT), Minor International, Central Plaza Hotel, and similar tourism plays reported continued recovery. Chinese tourist numbers remain below pre-COVID peaks but are trending up. Higher-end European and US tourist spending has more than recovered. The Iran war is hitting fuel-driven costs but not yet meaningfully suppressing visitor numbers.
Risk: a major Iran escalation that materially affects long-haul travel costs would hit this sector first. For now, the recovery is on track.
Q1 2026 disappointments
Small-cap technology in Thailand has had a tough quarter. Without dominant AI-exposed Thai names mirroring US tech leadership, the local tech segment looks underwhelming next to NVIDIA-led US gains. Some Thai tech names reported missing on margins as cloud cost pressure continues.
Consumer discretionary retail names showed mixed Q1 performance. Footfall has been steady but average basket sizes have softened, suggesting Thai consumers remain price-conscious. Convenience store operators (CPALL) and supermarket operators have held up better than department stores and apparel.
What this implies for the rest of 2026
The base case for the SET through year-end: range-bound between 1,450 and 1,600 with sector rotation. Petrochemicals, telcos, and banks should continue to lead. Tourism is a beta play on Iran de-escalation. Tech names underperform until either a global tech rotation or specific Thai AI-related news provides a catalyst.
For Thai investors building positions through tax-advantaged vehicles like Thai ESG and Thai ESGX funds, the Q1 evidence supports a more concentrated bet on the leading sectors rather than broad SET exposure. Several Thai ESG funds have heavy weightings in petrochemicals and telecoms specifically.
Q2 2026 earnings will be the next test. Petrochemical spreads will be watched closely, and the impact of Iran-driven energy costs on margins across all sectors will become clearer. Currently scheduled for August reporting.
