Shares of Carabao Group fell further on Friday, down more than 12% within this week, as analysts projected continued weakness in net profit momentum and lowered their target price in light of sluggish sales growth.
As of 11.44 A.M. Bangkok time, the share price of Carabao Group Pcl. (SET: CBG) dropped THB1.25/share, or 1.62%, to THB76.00/share, with a trading value of THB246 million.
The financial services firm CGS-CIMB Securities forecasts that Carabao Group’s 1Q23 performance would be below expectations. Nielsen reports that the entire beverage market increased by 14% YoY in 1Q23, whereas CBG likely saw a fall in domestic sales of 4.6% YoY for energy drinks. CGS-CIMB believes that CBG’s export sales will decline by 22% YoY in 1Q23 due to decreased sales in Cambodia and China.
Management at CBG claims that weaker economic conditions in Cambodia, which led to the closure of numerous industries, were the reason for the YoY and QoQ decrease in export sales.
The analyst reiterated a “SELL” rating with a lower target price of THB68.75.
However, Osotspa (SET: OSP, Hold with THB34.00 TP) still saw its sales rise QoQ in Cambodia, according to OSP’s management. CBG’s weaker sales led to lower economies of scale, hence despite lower aluminum and gas costs, CGS-CIMB expects its energy drink gross margin to decline 20bp QoQ to 34% in 1Q23. Thus now estimating 1Q23 net profit of only THB340 million (-48.5% YoY, -16.7% QoQ).
