ASL Securities wrote that Betagro Public Company Limited (SET: BTG) experienced a challenging first quarter in 2026, as an oversupply of pork in the market exerted downward pressure on net profit. The company’s net profit for 1Q26 was THB 1 billion, representing a 2.3% decline quarter-on-quarter and a sharp 46.4% decrease year-on-year.
Total revenue for the quarter also contracted, reaching THB 28 billion, down 5.2% QoQ and 6.4% YoY. The contraction was notably pronounced in the Food and Agro business segments, which contributed 55.6% and 26.5% of total revenue, respectively.
The decrease in profitability was primarily attributed to softened pork prices in Thailand, which reached a low of THB 56 per kilogram before recovering slightly following government intervention to control pork supply. The average pork price for 1Q26 was THB 64.2 per kilogram.
The gross profit margin (GPM) also narrowed to 14.9%, compared to 15% in the previous quarter and 17.7% in the same period last year. This contraction was aligned with the drop in pork prices and an increase in raw material costs. Net profit for 1Q26 accounted for 21.6% of the full-year 2026 forecast.
Looking ahead to the second quarter of 2026, ASL Securities expects net profit to recover quarter-on-quarter. This projected improvement is due to the company’s stringent cost controls and use of forward contracts to mitigate the impact of anticipated increases in raw material prices, which are expected to rise by 5-10% QoQ due to the ongoing energy crisis.
Pork prices are expected to recover moderately following the resolution of the market oversupply, with average prices projected at approximately THB 65-66 per kilogram since the end of the previous quarter. Chicken prices have remained stable at THB 40.5 per kilogram.
Meanwhile, seasonal demand during the Songkran holiday and the reopening of schools has bolstered egg consumption, resulting in an approximately 6% increase in egg prices to THB 3.6 per unit, up from THB 3.4 in the previous quarter.
The upcoming ‘Thai Chuay Thai Plus’ stimulus program, set to launch on June 1, 2026, is also expected to provide a positive impetus for consumer demand. However, on a year-on-year basis, net profit is still anticipated to decrease due to the high base effect from market oversupply, particularly affecting the Food business segment.
In the international segment, revenue from Singapore and Malaysia is expected to help offset a decline in revenue from Cambodia, which now represents 20% of International business revenue (down from 22.2% in 2Q25) due to ongoing geopolitical issues.
ASL has issued a ‘Buy’ recommendation for BTG, setting a 2026 target price of THB 24.00 per share, based on a price-to-earnings ratio (PE) of 10x. This is slightly above the four-year historical average PE of 8.4x (+0.5 S.D.). The current share price reflects a PE of 6.6x, discounting for weaker economic conditions, reduced purchasing power, oversupply of pork, and rising raw material costs.
Despite these challenges, BTG is considered attractive due to its superior profitability, with a projected gross profit margin (GPM) of 16.9% and a return on equity (ROE) of 22.5%, both higher than industry averages of 16.1% and 21.4%, respectively.
This is mainly due to strategic adjustments in their product mix and the focus on higher-margin sales channels. The company also maintains a robust financial structure, with an interest-bearing debt to equity (IBD/E) ratio of 0.35x and a debt-to-equity (DE) ratio of 1.02x, reflecting efficient capital management.
Furthermore, BTG stands to benefit from positive market sentiment driven by government economic stimulus and an expanding export market for frozen pork. The company is also expected to deliver a dividend yield of 5.2%, according to the brokerage.
