The share price of Berli Jucker Public Company Limited (SET: BJC) jumped 6.60% to THB 22.60 per share in the morning session on Friday following the positive outlook in the market that its retail giant BigC could turn around under the helm of a new Deputy CEO.
BJC extended gains for the third consecutive day on Friday, following a slight gain of around 0.50% in the past two trading days.
CGS International (Thailand) Securities (CGSI) has recently shifted its stance on BJC, following noticeable changes within BigC, a significant segment of the company. Historically bearish due to BigC’s consistent underperformance since the COVID-19 pandemic, the firm has now upgraded its recommendation based on promising structural improvements.
These changes began to emerge around mid-2024 when Gary Hardy assumed the role of Deputy CEO. His leadership appears to have catalyzed transformation within BigC, prompting initial positive signals. Despite this, CGSI held their recommendation pending observations on the execution of these strategies.
After evaluating the latter half of 2024 results, CGSI saw the initial traction of the turnaround, supported by the inclusion of Metin in the leadership team. This progression has bolstered CGSI’s optimism, noting that BigC is realigning with contemporary Thai consumer shopping behaviors, potentially spearheading significant recovery in revenues and profit margins.
The firm anticipates BJC’s net profit to grow at a compound annual rate of 12% over the next three years, based on conservative estimates. Furthermore, BJC’s sensitivity to interest rate cuts—where every 10 basis point reduction translates to a 0.7% profit increase—positions it favorably within the Thai retail landscape. Despite these positive projections, the stock remains attractively priced at a forecasted 16.2 times earnings for fiscal year 2025, below the sector average of 17.2 times.
In light of these developments and favorable market conditions, CGS International has upgraded its rating for BJC from ‘Hold’ to ‘Add’, confident in the authenticity of the ongoing turnaround and the potential upside in valuation.
