On Tuesday at 11:19 AM (Bangkok time), the share price of Thai Union Group Public Company Limited (SET: TU) gained 1.77% or THB 0.20 to THB 11.50, with a trading value of THB 31.74 million.
Pi Securities has assessed the first quarter 2026 earnings outlook for TU, projecting a net profit of THB 1,178 million, representing a 16% increase both year-on-year and quarter-on-quarter. However, excluding special items—primarily a tax income of over THB 380 million—the normalized profit is forecast at THB 782 million, a 26% increase from the previous year but a 19% decrease from the prior quarter.
According to Pi Securities, the year-on-year increase in normalized profit is attributed to the company’s price adjustments in response to the impact of U.S. tariffs. Meanwhile, the quarter-on-quarter decline is in line with seasonal factors.
Total revenue is expected to reach THB 31,566 million, up 6% year-on-year but down 10% quarter-on-quarter, driven by all business segments, particularly pet food, which continues to perform well due to a steady influx of new purchase orders.
Processed seafood and frozen food segments also benefited from price adjustments in response to the U.S. tariffs. The quarter-on-quarter decline is attributed to seasonal factors, especially in the frozen food business.
Gross margin is projected at 18.2%, close to the first quarter of 2025 but down from 18.8% from 4Q25, as the frozen food segment returns to normal margin levels after an unusually strong year-end performance.
Selling and administrative expenses are estimated at THB 4,577 million, representing a 3% decrease year-on-year and a 6% decrease from the previous quarter. This reflects lower expenses associated with company restructuring, following the conclusion of the Sonar project, while only the Tailwind project (expected to be completed in 2026) remains ongoing.
TU’s share of profit from associates is anticipated to be THB 291 million, stable compared to the previous year but up 63% quarter-on-quarter. The tax expense, excluding special items, is expected to reach THB 90 million, up 182% from the prior quarter, which recorded a tax income of THB 41 million.
The brokerage noted early signs of cost pressure from rising prices of certain raw materials, particularly tuna, which reached $2,000 per ton in March—a 27% year-on-year and 15% quarter-on-quarter increase. TU anticipates a significant cost impact beginning in the third quarter of 2026, as the company currently benefits from lower-cost inventory.
The company believes that any adverse impact from elevated tuna prices will be temporary, as it plans to gradually adjust product prices with trading partners. Similarly, increases in other raw material costs, such as steel and plastic—comprising around 11% of total production costs—are expected to be recovered through negotiations with partners.
TU will closely monitor the ongoing situation in the Middle East, since tuna prices could exhibit a pattern similar to 2023, stabilizing at $2,000 per ton for approximately three months. Meanwhile, the projected normalized profit for 1Q26 represents only 17% of the full-year forecasted profit of THB 4,721 million, according to Pi Securities.
This underscores the need to monitor the war’s impact and the effectiveness of TU’s price adjustments to determine whether annual targets will be met. For now, the full-year profit estimate remains unchanged.
Pi Securities maintains a ‘Buy’ recommendation on TU, with a target price of THB 15.00 per share, based on a 2026 PER of 13.5 times, which is aligned with the 10-year historical average.
