On Thursday at 11:02 AM (Bangkok time), the share price of i-Tail Corporation Public Company Limited (SET: ITC) slumped by 7.46% or THB 1.50 to THB 18.60, with a trading value of THB 224.89 million.
DAOL Securities (Thailand) downgraded ITC’s ratings from ‘Buy’ to ”Hold’ and revised the target price from THB 30.00 to THB 22.50 per share. The decision was driven by expectations that the company’s 2025 profit may encounter increased difficulties due to a high base in 2024, coupled with the impact of the global minimum tax (GMT) leading to higher tax burdens overall.
ITC anticipated that its 4Q24 normal profit, excluding foreign exchange gains, would reach THB 974 million, marking a 20% year-on-year rise but a 5% quarter-on-quarter decline. This figure fell short of the analyst’s forecasts of around THB 1.1 billion.
The annual profit increase aligned with improved gross profit margins, likely due to reduced destocking pressures and growth in premium product segments. However, the quarterly profit dip was influenced by a 3.4% decrease in gross profit margins, primarily driven by increased tuna costs.
DAOL Securities (Thailand) revised down the forecasts for ITC’s 2024 normal profit by 4% to THB 4 billion, presenting a 73% year-on-year increase. This adjustment reflects the underperformance in 4Q24 normal profit expectations.
Additionally, projections for the company’s 2025 normal profit were lowered by 10% to THB 4 billion, indicating a 1% year-on-year decrease, in response to the potential impact of the global minimum tax implementation, in conjunction with tax allocations from TU, ITC’s parent firm, as well as adjustments to SG&A and sales in line with the company’s investment in the transformation plan.
In the first three months of 2024, ITC’s share price lagged behind the SET index by -14%, although it closely tracked the index’s performance in the last 30 days. While the company is currently assessing the implications of the global minimum tax and anticipates that the effective tax rate will not exceed 15%, the analyst views this as a temporary weight on ITC’s share price until the assessment is finalized.
