ZEN Corporation Group Public Company Limited

Kasikorn Securities maintains a negative view on Thailand's restaurant sector, stating that economic stimulus measures continue to pressure the five SET-listed restaurant operators: M, ZEN, AU, OKJ, and MAGURO. This follows the Cabinet's approval of the Thai Chai Thai Plus Phase 2 program with a budget of 42.7 billion baht, extending the 60:40 co-payment scheme for another two months, from October 1 to November 30, 2026. Under the scheme, the government covers 60% of eligible spending, capped at 200 baht per person per day and no more than 1,000 baht per person over the two-month period, compared with 1,000 baht per month in Phase 1. Participants must confirm their eligibility via the Paotang application between October 1 and 15, and state welfare cardholders with eligibility will receive an additional 700 baht in October. The research team noted that the seven previous co-payment rounds failed to improve same-store sales growth, or SSSG, for listed restaurants. In the fourth quarter of 2025, the average SSSG of the five operators fell 9.6% even as private consumption grew 3.3%, and declined 8.2% in the second quarter of 2026 while private consumption grew 1.9%. It expects SSSG to remain negative in the third quarter of 2026 based on recent discussions with management. On investment recommendations, the research team maintains a negative view on the sector but prefers M over ZEN due to its clearer strategy and more evident earnings recovery outlook. M trades at a 2026 PER of 19.1 times versus a three-year core EPS CAGR of 19.4% and offers a dividend yield of 5.2%, while ZEN trades at a PER of 27.0 times versus a three-year core EPS CAGR of 20.8% and offers a dividend yield of 1.9%. It maintains a hold rating on both stocks, with a target price of 19.9 baht for M and 5.6 baht for ZEN.

Kasikorn Securities reported that combined normalized profit of five listed restaurant companies in the second quarter of 2026 was 281 million baht, down 29.0% from a year earlier, pressured by negative same-store sales growth and lower gross margin, but up 18.7% from the previous quarter. M and ZEN posted combined normalized profit of 230 million baht, down 19.6% year-on-year but up 28.7% quarter-on-quarter. OKJ recorded a normalized loss of 25 million baht as same-store sales growth fell 29.6%. MAGURO delivered the strongest profit growth at 23.4%. Kasikorn Securities maintained a negative view on the restaurant group amid weak demand and price competition, and prefers M over ZEN because of clearer earnings recovery prospects. M trades at a 2026 price-to-earnings ratio of 20.6 times and offers a dividend yield of 4.9%.