GLOBAL – Standout 3Q26F growth, with more to come

3Q26F earnings growth to stand out YoY. 3Q26 net profit is expected at Bt535mn, +36% YoY but -44% QoQ. The YoY improvement is driven by gross margin expansion, lower interest expenses and higher equity income, despite a slight decline in sales. The QoQ decline is mainly seasonal.

3Q26F sales. Revenue is expected to fall 1.5% YoY as SSS contraction outweighs store expansion. SSS is estimated at -6% YoY, pressured by: 1) a high-single-digit QoQ decline in rebar and structural steel prices, which account for 15% of sales, prompting customers to delay purchases; and 2) fragile purchasing power, heavy rains and late-September flooding, which reduced store traffic and construction activity. SSS contraction was broadly similar across all three months of the quarter. GLOBAL opened three new stores but closed its small The Nine Tiwanon store upon lease expiry due to relatively weak performance, bringing its total store count to 102 at end-3Q26 (+7% YoY, +2% QoQ).

3Q26F other items. Gross margin is expected to widen to 28.1% (+160bps YoY, -350bps QoQ), with the YoY expansion driven by: 1) a higher private-label sales mix; 2) price adjustments for private-label products; and 3) higher selling prices for general merchandise in line with market price adjustments, except for steel. Despite the decline in steel prices, steel gross margin remains at a normalized level of above 10%, although below the nearly 20% recorded in 2Q26 during the period of elevated steel prices. SG&A/sales is set to rise 40bps YoY to 22.5%, with SG&A up 1% YoY on store expansion, partly contained by disciplined cost control through improved incentive management and logistics optimization. The impact of higher diesel prices should be insignificant, as most cost increases have been passed through. Interest expense is expected to decline 49% YoY to Bt30mn, driven by short-term debt repayment funded by stronger operating cash flow in 1Q26 and a lower interest rate environment. Equity income is projected to rise 175% YoY to Bt80mn, supported by stronger contributions from Myanmar on better sales and margins and slightly higher earnings from Laos, more than offsetting weaker earnings from Indonesia.

Earnings outlook. Rebar and structural steel prices have returned to near pre-war levels and are expected to stabilize, which should encourage a recovery in steel demand after customers delayed purchases amid falling prices. Post-flood demand for home repair and cleaning products should provide additional support to 4Q26 SSS, although overall purchasing power remains weak. We expect 4Q26 earnings to improve both YoY and QoQ, supported by store expansion and a higher mix of high-margin products, despite our conservative assumption of slightly negative SSS. Given solid 3Q26F earnings and continued YoY growth expected in 4Q26, we maintain our 2026 earnings forecast.

Key risks are changes in purchasing power, in steel prices and farm income and new government policies. Key ESG risks are energy & waste management, sustainable products (E) and product quality management, labor practices and data privacy (S).