On Thursday at 11:05 AM (Bangkok time), the share price of Thai Union Group Public Company Limited (SET: TU) soared by 6.45% or THB 0.80 to THB 13.20, with a trading value of THB 407.26 million.
Kiatnakin Phatra Securities (KKPS) has upgraded its recommendation for TU from ‘Neutral’ to ‘Buy,’ raising the target price to THB 16.00 per share. The positive outlook is driven by an improving earnings trajectory at both TU’s standalone operations and its subsidiary, i-Tail Corporation (SET: ITC).
KKPS raised its 2026-28 group normalized earnings forecasts by an average of 16%, citing that TU’s standalone business is evolving from an earnings drag to a genuine growth driver. The brokerage expects the market to increasingly recognize this turnaround, likely resulting in a narrowing valuation discount associated with TU’s stake in ITC.
After accounting for the value of TU’s 79.3% position in ITC, KKPS calculates that the standalone operation is valued at just THB 7 billion, or 3.5x projected 2026 earnings—an appealing proposition given that the business contributed 42% of the group’s 2025 profit and is forecasted to represent 47% by 2028 on the back of sustained growth.
The brokerage emphasizes TU’s enhanced earnings phase, resulting from constant sales growth in its mature core ambient business, ongoing cross-selling initiatives, and cost optimization under the leadership of a new CFO. These efforts are expected to lift TU’s net margin (excluding ITC) from 1.7% in 2026 to 2.3% in 2028, supporting a robust three-year normalized EPS CAGR of 18%.
Improving profitability is projected to boost group return on assets from 2.6% in 2025 to 3.7% in 2028, bolstering the case for a re-rating of TU shares. Additionally, a consistent dividend payout policy is set to offer yields of 5.9% and 6.7% in 2026 and 2027, respectively.
