KGI Securities maintains an ‘Outperform’ rating for Thai Union Group Public Company Limited (SET: TU), following robust profit growth in 2Q24.
TU announced a net profit of Bt1.22 billion in 2Q24, showing a 19% YoY increase and a 6% QoQ increase. The result surpassed KGI’s forecast by 5% but aligned with market expectations, primarily due to the impressive performance of the pet care segment. The 1H24 net profit represented 39% of the full-year forecast of Bt6.1 billion.
Additionally, the company declared a cash interim dividend of Bt0.31 per share, with an ex-dividend date set for August 21, offering a yield of 2.2%.
Sales revenue saw a 4% YoY and 6% QoQ growth to Bt35.3 billion, propelled by robust growth in the pet care (+41% YoY), value-added (+16% YoY), and ambient (+1% YoY) businesses.
KGI remains optimistic about TU’s earnings in 2H24, expecting continued gross profit margin improvement, specifically from the ambient business as selling prices are projected to outpace raw material costs.
Furthermore, the firm anticipates a slightly positive impact on TU’s 2025 net profit (1%-2%) from the loan agreement with ITC, leading to reduced interest expenses. The forecasted decline in interest rates domestically and internationally is also viewed as a favorable factor for TU in the upcoming year.
The analyst maintains an ‘Outperform’ rating on TU with a 2024 target price of Bt19.70.
