CGS International Securities (Thailand) (CGSI) stated that the first quarter earnings of BJC slightly beat its estimates and Bloomberg consensus, while expecting earnings growth to continue moving forward.
CGSI wrote in its analysis paper that Berli Jucker Public Company Limited (SET: BJC) posted a significant net profit of THB 1.09 billion in 1Q25, an impressive 155% year-over-year increase, although it dipped by 34% compared to the previous quarter.
Adjusting for extraordinary items, such as a THB 176 million loss from discontinuing Thai Scandic Steel operations and a THB 659 million tax adjustment from 2024, the core net profit climbed to THB 1.27 billion—marking a 17% rise from last year. This performance surpassed predictions by 5% and exceeded Bloomberg analyst expectations by 13%, mainly due to a rebound in margins, robust cost management, and substantially reduced interest expenses.
Despite stagnant sales, with revenue slightly declining 0.3% year-over-year to THB 38.5 billion, margin gains painted a brighter picture. Although packaging sales contracted following a temporary halt in can orders from a major client over production difficulties, improvements were noted across other segments, such as retail, consumer goods, and healthcare. These enhancements, along with lower raw material costs and an advantageous product mix, boosted BJC’s consolidated gross margin by 40 basis points to 20.4%. Meanwhile, strategic control over advertising spending and logistics allowed the SG&A to sales ratio to decrease by 10 basis points to 20.1%.
While the retail segment lagged with a 6% decline in profit to THB 977 million, and a reduced gross margin due to non-food sales declines and store closures, BigC still posted a same-store sales growth of 2.1%—suggesting potential market share expansion. The continuing strategic repositioning and store updates for BigC are anticipated to transform it into a significant earnings generator by the fiscal year 2026.
Going forward, despite challenges such as subdued consumption and lower air-conditioner and beverage sales, earnings growth is still expected to persist. Key growth drivers include the timely resumption of aluminum can orders, elimination of annual losses from the TSS closure, meticulous cost management, and reduced interest expenses.
As a result, CGSI has increased its forecast for core net profits from 2025 to 2027 by 1.5–4.1% to account for stronger cost efficiencies and the influence of lower interest rates. CGSI maintained an ‘Add’ rating and also raised its DCF-based target price for BJC to THB 26, underscoring potential for valuation growth as BigC’s turnaround strategy progresses, especially post-2026.
