3Q26 net profit was in line at Bt1.32bn, +1% YoY on better sales and gross margin but -17% QoQ on seasonality. In Oct to date, SSS improved sharply to +8% YoY for HomePro and +10% YoY for MegaHome (the sector’s best so far), vs. -2.9% and -0.2% in 3Q26, driven by post-flood demand for home repair and cleaning products in Bangkok and the vicinity. We expect 4Q26F earnings to be the year’s best, up YoY and QoQ on positive SSS, store expansion and margin improvement, with a higher mix of high-margin private brands and stronger supplier rebates partly offsetting the fading benefit from lower-cost inventory. We maintain Outperform with a mid-2027 DCF TP of Bt8.2 (WACC 7.1%, LTG 1.5%).
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HMPRO – 3Q26: In-line with estimates
3Q26 net profit was in line at Bt1.32bn, +1% YoY but -17% QoQ. The YoY growth reflects slightly higher sales and gross margin expansion, offset by higher SG&A/sales and lower other income. The QoQ decline was mainly seasonal.
3Q26 highlights. Revenue rose 1% YoY on store expansion despite SSS contraction. We estimate 3Q26 SSS at -2.9% YoY for HomePro and -0.2% YoY for MegaHome (vs. -1.0% and -4.1% in 2Q26), pressured by: 1) a high-single-digit QoQ decline in steel prices, prompting customers to delay purchases; 2) a 1% cannibalization impact on HomePro SSS from the second Samui store in May; and 3) fragile purchasing power, heavy rains and late-September flooding, which reduced store traffic and delayed deliveries, installations and revenue recognition. Monthly SSS bottomed in August amid heavy rainfall, turned positive in the first half of September, but contracted again in late September due to flooding. In 3Q26, the company opened a new HomePro store in Min Buri (hybrid format, adjacent to a MegaHome store), bringing its total store count to 150 (+8% YoY, +1% QoQ). Gross margin expanded 70bps YoY to 27.4%, driven by elevated product prices (except steel) and a higher private-label mix as consumers traded down. The private-brand sales mix rose to 22.2% for HomePro and 23.6% for MegaHome at end-3Q26 (vs. 21.2% and 21.0% at end-3Q25). Higher oil prices should have a limited impact, as most incremental logistics costs can be passed through to suppliers. SG&A/sales increased 20bps YoY to 21.2% on store expansion and maintenance expenses, outpacing sales growth of 1%, despite lower personnel and marketing expenses. Other income fell 7% YoY on lower vendor promotional support and service income, partly due to late-September flooding.
Earnings outlook. In Oct to date, SSS is estimated at +8% YoY for HomePro and +10% YoY for MegaHome, the sector’s best so far, driven by post-flood demand in Bangkok and surrounding provinces (about 40% of sales). Historically, sales in flood-affected areas have rebounded at a double-digit rate, with the severe Hat Yai flooding in 4Q25 supporting double-digit growth for around three months. We expect post-flood sales to carry a normalized margin, reflecting a mix of high-margin cleaning products and low-margin electrical appliances. Positive SSS should also support gross margin from more supplier rebates, partly offsetting the fading benefit from lower-cost inventory seen in 2Q26-3Q26. We expect 4Q26 earnings to mark the year’s best, rising YoY and QoQ on positive SSS, store expansion and margin improvement.
Key risks are changes in purchasing power and new government policies. Key ESG risks are energy & waste management, sustainable products (E) and product quality management, labor practices and data privacy (S).