Over the past year, one of the most talked-about topics has been various construction projects, including electric train projects and mixed-use developments. While contractors benefit significantly, there are also numerous public companies in the construction materials sector listed on our stock market, totaling over 21 companies. These include manufacturers of concrete and precast concrete products, ceramic tiles, concrete slabs and piles, roofing, wall panels, synthetic wood, and plastic processing businesses (Holding Companies), among others. TerraBKK Research has tracked the 2017 financial results of the construction materials sector. Let's take a look at the revenue and net profit figures, as well as financial ratios such as ROE, ROA, and NPM.

           Revenue and Net Profit from the construction materials sector in 2017 showed that Thai Cement (SCC), a holding company in the cement and construction products sector, as well as chemicals and packaging, generated the highest revenue in the group at 482 billion baht. If we look at the continuous growth trend of revenue (Up Trend) from 2014 to 2017, there are four companies: Vongchai Group (VNG), Eastern Polymer (EPG), and S.Kijchai Enterprises (SKN). However, the most noteworthy is TCM Corporation (TCMC), a manufacturer of both machine-woven and hand-woven carpets, which has consistently shown growth in both revenue and net profit, with 2017 figures of 7.71 billion baht in revenue and 204 million baht in net profit.


            Return on Equity (ROE) in this sector shows that Diamond Roof Products (DRT), a manufacturer of roofing, wall panels, and synthetic wood products, has achieved continuous ROE growth (Up Trend), being the only one in the group. This reflects the company's ability to manage operations and generate returns for shareholders, with figures of 21.16% (2017), 18.58% (2016), and 14.49% (2015). Meanwhile, TOA Paint (Thailand) (TOA) recorded the highest ROE in the group at 37.01% in 2017, surpassing the previous champion Dynasty Ceramic (DCC), which has shown a declining trend with ROE figures of 32.59% (2017), 44.41% (2016), and 47.03% (2015).

           Return on Assets (ROA) reflects the efficiency of companies in utilizing assets to generate returns. The higher the value, the better. DCC maintained its championship in 2017 with an ROA of 20.68%, despite a declining trend. However, when looking at the continuous growth trend of revenue (Up Trend) from 2014 to 2017, TerraBKK Research found only one company, Diamond Roof Products (DRT), with figures of 16.73% (2017), 15.04% (2016), and 12.22% (2015).


           Lastly, regarding Net Profit Margin (NPM), over the past two years, Thaksin Concrete (SCP), a manufacturer of various precast concrete products, had the highest net profit margin in the group at 16.74% in 2015 and 16.48% in 2016. However, in 2017, it was surpassed by Deecon Products (DCON), a manufacturer of precast concrete slabs and piles, with a net profit margin of 20.4%, the highest in the group. In terms of continuous growth in net profit margin (Up Trend) over the past three years, TerraBKK Research found that Diamond Roof Products (DRT) showed an interesting increasing ratio of 9.84% (2017), 9.42% (2016), and 7.93% (2015).

            Debt to Equity Ratio (D/E) in this sector is within normal limits, with no cause for concern, as the ratio does not exceed 2 times. Only TCM Corporation (TCMC) has a ratio of 2.7 times, which has been increasing over the past years from 2.22 times (2016) and 1.58 times (2015). ---TerraBKK


Article by: TerraBKK Investment Tips
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