According to a recent analysis by KGI Securities (Thailand), Ichitan Group Public Company Limited (SET: ICHI), a leading player in Thailand’s ready-to-drink (RTD) tea market, continues to reinforce its market position while accelerating strategic diversification initiatives.
ICHI currently holds the No. 2 domestic RTD tea market share at 49% by value, trailing only Oishi, and remains well-poised thanks to its signature green tea brand equity and integrated production prowess.
ICHI has made significant progress in diversifying its revenue base beyond RTD tea. As of 2026, RTD tea accounts for 65% of its revenue, down from 70%, as the company increases focus on fast-growing non-tea beverages—Yen-non-tea (rising to 15% from 10%) and Yen (now 10% from 15%). Notably, the OEM/export segment doubled its contribution from 5% to 10%, supported by solid financials and strong earnings anchored in the domestic market (90% of revenue).
Additionally, the expansion into CLMV countries (Cambodia, Laos, Myanmar, Vietnam) also presents incremental growth potential. ICHI’s strategic roadmap centers on sustaining its RTD tea leadership while scaling up non-tea offerings to lessen its reliance on the green tea category.
KGI highlights five key catalysts that are expected to underpin ICHI’s robust earnings outlook in 2026. First, a shift in weather patterns from La Niña to Neutral–El Niño is forecasted to raise temperatures, historically boosting RTD beverage sales—ICHI recorded a 26% YoY increase in tea and a 76% YoY jump in non-tea beverages during the 2023 El Niño.
Second, ICHI’s earnings are projected to surge by 17% YoY in 2026, outpacing the peer average of 10%, supported by hotter weather, a rebound in tourism (with 34 million arrivals, up 4% YoY), and operational leverage. Third, ICHI’s net cash position and low capital expenditures will likely sustain generous dividends, with a dividend per share (DPS) of THB 1.25 (yielding 9%).
Fourth, declining raw material costs—PET resin expected to fall 12% YoY and sugar by 18% YoY in the first half of 2026—should enhance margins, with every 1% cost drop translating into a 0.5%/0.2% profit increase. Lastly, improved consumer confidence following Thailand’s recent general election is set to spur beverage consumption.
KGI notes the company’s earnings seasonality, with the second quarter typically outperforming the rest of the year, followed by the first, third, and fourth quarters.
Looking ahead, ICHI’s core earnings growth for 2026–2028 is projected at 17%, 9%, and 6% YoY, respectively—4–6% ahead of consensus. This growth is driven by a recovery in RTD and non-tea sales and disciplined cost management.
Gross profit margin (GPM) is anticipated to rise to 24.6% in 2026, 25.0% in 2027, and 25.1% in 2028, underpinned by a superior product mix, increased scale efficiency, and reduced selling, general, and administrative expenses as a percentage of sales. However, ICHI’s pricing power remains modest except for newly launched high-margin products.
KGI has initiated coverage on ICHI with an ‘Outperform’ rating and a 2026 target price of THB 17.70 per share, highlighting the company’s attractive risk-reward profile due to its compelling valuation and high 9% annual dividend yield. Moreover, a 2H25 DPS of THB 0.60 (equivalent to a 4% yield) is anticipated.
