Bualuang Securities revealed via ‘Kaohoon’ that the appreciation of the Thai baht is likely to have a detrimental effect on food export companies. For every one Thai baht strengthening against the US dollar, a potential negative impact of 2-5% on sales and a minimum of 5% on profits of food export businesses is expected. Despite this, companies have already implemented hedging strategies to mitigate such challenges.
Nevertheless, the analyst remains optimistic about the business outlook, citing a positive sentiment driven by the upcoming high season and a stable price trajectory, and gives ‘BUY’ recommendations for food companies, including
- i-Tail Corporation Public Company Limited (SET: ITC), with a target price of THB 27 per share. ITC is projecting a strong year-on-year growth in 3Q24, supported by robust sales volume and profit margin. However, a weaker quarter-on-quarter performance is expected due to a high base effect. The company is estimated to achieve a profit of THB 3,151 million in the fiscal year 2024, reflecting a 39% increase year-on-year from the previous year’s net profit of THB 2,281 million.
- Thai Union Group Public Company Limited (SET: TU), with a target price of THB 18 per share. The company’s leadership is assured of revenue growth in 3Q24 on both a year-on-year and quarter-on-quarter basis across all sectors. This positive performance is expected to drive TU’s revenue and enhance its profit margin.
- Charoen Pokphand Foods Public Company Limited (SET: CPF), with a target price of THB 27 per share. In 3Q24, the company is anticipated to see a year-on-year increase in core profit, attributed to the escalation in meat prices in Thailand, Vietnam, and international markets. Nevertheless, the figure is projected to weaken on a quarterly basis if there is a reduction in revenue share.
- GFPT Public Company Limited (SET: GFPT), with a target price of THB 15.70 per share. GFPT is projected to experience a year-on-year profit growth in 3Q24, driven predominantly by an uptick in profit and profit margin from its joint ventures (JVs). Conversely, the company’s performance in the same quarter is forecasted to decline quarter-on-quarter due to a reduction in export volume and decreased profit from JVs.
- Betagro Public Company Limited (SET: BTG), with a target price of THB 26 per share. In 3Q24, the company is anticipated to see a significant surge in profit on both a year-on-year and quarter-on-quarter basis. This boost is attributed to increased prices of pork and chicken, heightened export volumes, and reduced costs stemming from a decline in raw material prices.
The analyst anticipates a favorable outlook driven by the establishment of the new government. Economic stimulus measures are projected to be implemented subsequently, resulting in a surge in consumer spending, approval of government projects, and the creation of additional employment opportunities.
The positive developments are viewed as advantageous for energy drink companies, prompting a ‘BUY’ recommendation for Carabao Group Public Company Limited (SET: CBG) with a target price of THB 85 per share. The company’s profit in 3Q24 is forecasted to increase both year-on-year and quarter-on-quarter driven by heightened sales volume.
Moreover, this upward trajectory is expected to persist into 4Q24, with holidays and special events during the period. These circumstances are also poised to benefit BG Container Glass Public Company Limited (SET: BGC).
