TRIS Rating affirms the company rating on CH. Karnchang PLC (CK)

and the ratings on its outstanding senior unsecured debentures

at “A-” with a “stable” rating outlook.

The ratings reflect CK’s leading position in Thailand’s engineering and construction (E&C) industry, supported by its strong competitive advantages in managing large-scale and complex construction projects, as well as a substantial amount of backlog. Additionally, the ratings acknowledge the synergy and financial flexibility the company gains from its strategic investments. However, these strengths are partially offset by the company’s high leverage and the relatively thin profit margins of its E&C business amid the cyclicality and intense competition in the E&C industry.

The “stable” outlook reflects our expectation that CK will maintain its competitive position in the E&C business and achieve an operating performance in line with our target. CK to keep its EBITDA margin at around 9%-10% and the debt to EBITDA ratio to decline and be maintained at around 10 times over the next couple of years.