Mr. Jittiporn Jantarach, Chief Executive Officer of Exotic Food Public Company Limited (mai: XO), stated that business performance is expected to improve in the second half of the year, particularly in the key European market. Incoming purchase orders and pending deliveries reinforce the company’s confidence that the third quarter of 2026 will show clear growth over the second quarter.
XO anticipates that sales in the latter half of the year will surpass those in the first half, supporting the company’s annual revenue growth target of around 10% compared to the previous year.
A key factor involves inventory revaluation, which has already been reflected in the first half’s financial statements. Most of this impact involved chili raw material inventory, originally procured to support large orders from the U.S. market in 2023, prior to a slowdown in sales from that region.
The company has gradually managed excess raw material and recognized accounting effects amounting to around THB 75 million in the first and second quarters of 2026. In the third quarter, only minor expenses related to raw material disposal remain, which are comparatively small.
Mr. Jittiporn noted that after recognizing major inventory impacts in the first half of the year, operational results in the second half will better represent the company’s underlying business potential. Growing sales volume is also expected to improve economies of scale, supporting a higher profit growth rate relative to sales
In the second quarter of 2026, the European market accounted for nearly 83% of XO’s total sales revenue, with significant growth potential remaining, especially in Germany where a major customer operates over 10,000 supermarket branches. XO’s products are currently available in about 5,000 modern trade and premium retail locations.
The company has set a short-term goal to expand distribution in modern trade and leading retail outlets in the European market to 8,000 locations. This initiative aims to increase both distribution points and sales from the existing customer base. XO is also investing in marketing and brand awareness to maintain its leadership in the European Sriracha sauce market over the long term.
The company’s recovery has already been reflected in its second quarter performance, with sales revenue reaching THB 582.76 million, a 12.74% increase from the previous quarter. Sales volume also grew 5.88% to 5,892 tons, particularly driven by the European market.
XO is laying the foundation for long-term growth with an investment in a new factory at the Rojana Laemchabang Industrial Estate in Chonburi Province, valued at approximately THB 1,299.48 million. This facility will support increased production capacity and international expansion. The company has started procuring machinery and plans to finance the investment with about 70% from loans and 30% from cash to balance investment, cash flow, and shareholder returns.
Mr. Jittiporn added that XO’s long-standing presence in the market and available data point to further opportunities, especially in Europe where expansion in retail channels remains possible. Constructing the new factory ensures production capacity will be ready to meet anticipated demand growth in the coming years, alongside expanding Sriracha sauce exports globally.
Additionally, XO’s board of directors recently approved an interim dividend payment for the first six months of 2026 at THB 0.378 per share. The XD sign will be posted on 24 August 2026, with payment on 9 September 2026. This move underlines the company’s commitment to delivering shareholder returns alongside investments for long-term growth.
According to Pi Securities, XO’s management has already observed an increase in orders for the second half of the year, prompting the company to revise its annual revenue growth target from 5% to 10%. With first-half revenue rising by just 1%, there is potential for full-year growth to exceed 15%.
After recognizing more than THB 74 million in chili inventory write-offs in the first half, approximately THB 10 million in additional expenses for disposal will be recorded in the third quarter. Any additional sugar costs in the first half are expected to have minimal impact due to higher production volumes.
The new factory project remains on track, with construction scheduled to start in the third quarter of 2026 and operations targeted to begin in 2028. Total production capacity will increase by 26% to 43,905 tons, with an investment of around THB 1.3 billion.
XO’s net profit for the first half of the year represents about 47% of the annual target. Financial performance is expected to recover in the second half as there are no more inventory provisions, and sales are projected to grow, as per the brokerage.
Consequently, Pi Securities has adjusted XO’s full-year net profit estimate to THB 535 million, including provisions. As the current share price reflects the fair value of THB 21.90 per share, the recommendation remains ‘Hold’.
