CGS International Securities (Thailand) (CGSI) has released its latest analysis on Berli Jucker Public Company Limited (SET: BJC), highlighting the company’s boldest restructuring move in years under a “fix or close” approach.
This strategy is already taking shape, with the closure of its Thai-Scandic Steel subsidiary (a steel producer) in 1Q25 and the shuttering of 44 BigC Mini branches in Q2. Plans are in place to close an additional 120 branches in the second half of this year and another 26 in 2026.
Alongside these closures, BJC is accelerating hypermarket upgrades, revamping its homeline and softline product segments, consolidating distribution centers for greater efficiency, and implementing AI technology to enable precise demand forecasting.
However, these efforts are putting short-term pressure on performance. The company noted that same-store sales growth (SSSG) declined by 0.6% in 2Q25 and expects a further decrease of 1.0–1.5% in Q3, as improvements are underway at 11 key locations. Rental income has also temporarily dipped during this period.
Gross profit margin (GPM) is under pressure as well, owing to inventory clearance in homeline and softline, as well as roughly THB 20 million in one-off costs from relocating and consolidating distribution centers. Nevertheless, CGSI expects BJC to begin recovering by late 2025 as restructuring benefits start to emerge.
The shutdown of 164 loss-making BigC Mini branches, while resulting in a THB 700 million annual sales loss, is expected to lift net profit. Moreover, the major upgrade of 11 hypermarkets is set for completion in 4Q25, projected to drive SSSG and rental income in 2026. BJC targets an occupancy rate increase to 93–94%, up from 91% in Q2.
Looking ahead to 2026, CGSI forecasts an improvement in BigC’s GPM as new products roll out from November 2025, and anticipates annual cost savings of around THB 150 million from the centralized distribution initiative. While profits may soften temporarily, the brokerage firm sees restructuring as key to enhancing BJC’s competitiveness and long-term profitability.
At present, BJC stock trades at 14.8 times projected 2025 earnings (1.75 standard deviations below the 3-year average P/E) and offers a 4.6% dividend yield—levels CGSI considers attractive.
The securities firm maintains a “Buy” recommendation with a target price of THB 22 per share. Downside risks include sluggish tourism recovery and weakening consumer confidence, while upside could come from a rebound of Chinese tourists and a revival in domestic consumption.
