Kiatnakin Phatra Securities (KKPS) wrote in its report with a positive note regarding the performance of Berli Jucker Public Company Limited (SET: BJC), the conglomerate behind retail giant Big C.
Following an analyst meeting on Friday, KKPS pointed out that BJC’s management expressed their confidence to achieve its full-year target and expected both its retail and non-retail businesses to rebound from April.
BJC maintained its prior guidance for mid-single-digit revenue growth and margin improvement of 20 to 40 basis points for 2025. The company forecasts contributions to top-line growth from retail and non-retail arms in equal measure, but expects margin enhancement to come primarily from the non-retail segment, thanks to an anticipated reduction in commodity and energy costs.
This is relatively in line with KKPS’ expectations, which peg consolidated revenue growth at around 3% this year and a modest 10-basis-point increase in margins.
For the current quarter, the company’s management signaled a positive shift from April. In retail, however, same-store sales growth (SSSG) for the month is expected to land between flat to negative 2%, largely due to sluggish demand for cooling products. Stripping out these items, underlying SSSG is forecasted to post small gains.
Looking ahead, May’s performance could benefit from improving weather conditions and continued strength in food categories. While BJC is experiencing the drag from a slowdown in international tourism in locations like Ratchadamri, Pattaya and Samui, the company sees this being partly offset by robust sales growth in upcountry stores, particularly across the North, Northeast, and South.
Margin trends at Big C are likely to see sequential improvement from the first quarter of 2025, supported by more efficient promotional strategies and a normalization in clearance volumes of soft goods.
BJC’s non-retail operations are also on course to deliver year-on-year sales growth in the second quarter of 2025, following the resumption of Nestlé’s orders in May and the launch of new canned product lines. Consumer goods are poised for gains on the back of stronger food demand.
Management believes these segments can preserve the positive momentum in margin expansion seen earlier in the year, given further declines in raw material and energy prices.
As a result, KKPS remains optimistic on BJC’s prospects and gives a ‘Trading Buy’ recommendation for the company with a target price set at 25.40 baht per share, forecasting the company’s net profit to increase steadily over the next three years: estimating 5.27 billion baht in 2025, rising to 5.88 billion in 2026, and 6.50 billion by 2027.
