In the aftermath of a rough week, Thai Union Group Pcl. (SET: TU) shares rose by more than 3% on Monday, snapping a losing streak of over 10%.
The share price of Thai Union, a global leading seafood company, increased 3.01%, or THB0.40 per share, to THB13.70 at 15:10 Bangkok time, for a total trading value of THB513 million.
Thai Union projects a 5%-6% year-over-year rise in revenue this year, with gross profit margin (GPM) growth of at least 18%-18.5%, up from 17.6% last year, and a target for SG&A/Sales in 2023 of 11%-12%, down slightly from 12.3% in 2022.
LH Securities maintains its “BUY” rating on Thai Union, with a price target of THB17.00, noting that the company still faces downside risks from Red Lobster, despite some analysts believe Red Lobster’s performance could improve significantly this year, but this would still be in the red zone. Thai Union’s earnings growth could fall short of projections if the restaurant business recovers slower than anticipated.
Nevertheless, Thai Union’s high dividend yield of 6% per year represents an extra strength.
Meanwhile, DBS Treasures (Singapore) expects Thai Union’s core net profit of THB1.08 billion, down 35.9% YoY and 37.9% weaker QoQ. The weak 1Q23 performance is expected to be dragged by weaker revenue, GPM, higher SG&A to sales, and lower tax credit.
Total revenue for 1Q23 is projected to come in at THB33 billion, dropping 7.8% YoY and declining 15.6% QoQ due to softer revenue across all business segments as customers delay ordering given their high inventory levels from stocking up late last year, and lower demand from higher fish price and rapid Baht appreciation.
