The management of i-Tail Corporation Public Company Limited (SET: ITC) remains optimistic about achieving a 15% sales growth target for the fiscal year 2024, following a 12% year-on-year increase in the first quarter, according to the analyst meeting with the company’s management, CGS International (Thailand) wrote in a comment.
The management is confident in meeting this target due to recovering demand as destocking issues have eased, the introduction of new premium products, and gaining new customers.
The projected earnings for the second quarter of 2024 are expected to show significant year-on-year growth. Sales are anticipated to be on track to meet the full-year target, with over 90% of the orders secured. The company’s gross profit margin is expected to remain healthy, supported by an increase in sales of premium products and favorable fish costs. However, there may be a slight softening in the gross profit margin quarter-on-quarter due to the commencement of new production capacity.
The company foresees that sales in the first half of 2024 will account for 45% of the full-year total, with the fourth quarter expected to be the strongest period. They anticipate continuous year-on-year and quarter-on-quarter growth in both sales and earnings throughout the fiscal year 2024.
The management’s projection for tuna prices in 2024 is set at 1,680, compared to 1,333 in the first quarter of the year. They believe that tuna prices in March was the lowest level, but even with an average of 1,680 in 2024, it would still lower than 1,800-2,000 in 2023. Although the gross profit margin in the second half of 2024 may be impacted by higher fish costs, this is expected to be offset by increased sales volume.
Additionally, any increase in the minimum wage could potentially have a 0.2% per quarter impact on the company’s gross profit margin.
Target price consensus from Bloomberg is THB28.00 per share, giving a 34% upside from the current trading price that fell to THB20.90 per share.
