At the end of the morning session on Tuesday, the share price of Betagro Public Company Limited (SET: BTG) jumped by 5.22% or THB 1.20 to THB 24.20, with a trading value of THB 70.71 million.
Phillip Securities anticipated BTG to shift from a loss to profitability in 2Q24, driven by positive growth trends both QoQ and YoY. While the company’s revenue is expected to experience a modest uptick, the gross profit margin is anticipated to increase significantly. This surge is attributed to the projection that average costs will escalate at a slower pace compared to the surging pork prices, leading to the gross profit margin reaching 12.5%.
Pork prices are projected to continuously increase from 2Q24 to 3Q24, as the Swine Raisers Association of Thailand aims to raise farm swine prices to the target of THB 80 per kilogram from the current THB 68 per kilogram. While this development has generated positive sentiment for BTG, the company may face challenges due to rising animal feed prices, particularly corn prices, which play a significant role in animal feed production. The potential increase in corn prices could potentially offset the positive sentiment gained by BTG.
The analyst maintains a ‘BUY’ recommendation for BTG, with a target price of THB 26.00 per share.
Meanwhile, Finansia Syrus Securities anticipates that BTG’s earnings for 2Q24 will achieve THB 526 million, marking a substantial turnaround from the losses of THB 124 million in 1Q24 and THB 351 million in 2Q23.
This positive shift is attributed to the recovery in meat prices, surpassing production costs. The company is also benefiting from the growth in chicken exports and a decline in material costs. These factors are expected to boost BTG’s gross profit margin and create a favorable outlook for its performance in the 3Q24, especially during the peak season for chicken exports, alongside the ongoing increase in pork prices.
If BTG’s 2Q24 earnings align with expectations, the company would achieve profits in 1H24 amounting to THB 402 million, marking a significant recovery from the THB 42 million profit recorded in 1H23. This performance would represent 15% of the analyst’s FY2024 forecast.
Initially, the earnings forecast for 3Q24 was estimated to fall within the range of THB 800 million to THB 1,000 million. However, this projection could potentially lead to a 20% downside for the FY2024 earnings forecast of THB 2.7 billion. The analyst gives a ‘Speculative-Buy’ recommendation for BTG.
