Krungsri Securities (KSS) has set high hopes for Sappe Public Company Limited (SET: SAPPE), overlooking its weak third quarter performance for a decent 4Q24 growth to meet sales projection.
The share price of SAPPE rose 3% to THB68.25 per share in the morning session on Thursday.
KSS maintained its “BUY” rating on SAPPE with a target price at THB100 per share. The firm expected 3Q24 core profit to drop 37% QoQ and 22% YoY to THB268 million due to 1) soft international sales as a result of geopolitical tensions and distributorship issues in Indonesia, and 2) weaker gross margin due to softer sales. However, sales should grow YoY and earnings should be decent in 4Q24 of SAPPE to meet KSS’ 15% projected sales growth for FY24 (lower end of guidance). Additionally, 9M24 profit is 83% of KSS’ FY24 earnings.
KSS noted that a THB1 appreciation against the US dollar would reduce core profit by 1.5%.
Still, SAPPE is KSS’ top pick in the beverage sector, expecting operation to recover from 4Q24 and beyond.
