Krungsri Securities (KSS) expresses a neutral view on Berli Jucker Public Company Limited (SET: BJC), following the latest analyst meeting, as management guided for mid-single-digit sales growth in 2026, alongside a projected gross margin increase of 0.2 to 0.4 percentage points year-on-year.
This margin improvement is expected to be driven primarily by the consumer segment, particularly from increased sales of premium products and enhanced profitability in the Big C supermarket chain.
BJC’s long-term expansion strategy will focus on small-format retail, with plans to double the number of Mini Big C stores to 3,000 by 2030. Capital expenditure (CAPEX) is projected to be THB 12–14 billion in 2026, with THB 8 billion earmarked for the expansion of Big C.
For Big C, management aims for low-single-digit same-store-sales growth (SSSG), with expectations of a recovery from the second quarter of 2025 onwards, following a period affected by unusually cool weather in 2Q24 that resulted in a low base for comparison.
Additionally, BJC plans to diversify revenue by increasing its focus on rental income, with a strategy to develop eight community malls over the next five years. This will initially involve converting existing Big C stores, at a CAPEX of THB 1.4 billion per conversion.
Logistics costs currently represent about 0.4% of Big C’s sales and 1.2% of non-Big C sales. Management cautioned, however, that any prolongation of the ongoing war in the Middle East could put pressure on gross margins.
Quarter-to-date, SSSG is negative 3–4%, primarily due to the absence of Easy E-Receipt promotions. However, BJC expects a swift recovery in 2Q26 as warmer weather drives up demand for seasonal products like air conditioners and fans.
Despite the positive operational guidance, key risks remain. Krungsri highlighted the downside from a potentially soft global economic outlook and continued geopolitical instability in the Middle East, both of which could impact sales and profitability.
Following these, the brokerage maintains a ‘Buy’ rating on BJC and sets a target price at THB 25.00 per share.
