The share price of Exotic Food Public Company Limited (mai: XO) extended its gains on Thursday as the company recently reported high net profit growth in the second quarter while signalling for a quarterly high in the third.
XO reported a net profit of Baht 212 million in 2Q23, increased 125% from a net profit of Baht 94 million in 2Q22. The increase was mainly due to an acceleration in revenue from sales and gross profit margin.
XO extended its gain by 5.08% in the morning session to trade at THB31.00 per share on Thursday after settling 22% higher yesterday in response to its outstanding 2Q23 results.
Mr. Jittiporn Jantarach, Managing Director of XO, told “Kaohoon” that operations in the third quarter are expected to outperform on a year-on-year and quarter-on-quarter basis. The current sales as of today already topped the previous quarter.
The MD noted that the US market saw significant growth in the previous quarter, accounting for 10% of its total sales, which was higher than expected. Due to this growth, the company rolled over its target sales for North America to 15% of its total growth by the end of this year. With more orders from the U.S., Canada and Mexico, the company, yet again, raised its sales growth forecast to 30% this year after the previous estimate for 20% expansion.
XO also stated that the company plans to introduce new products in the final quarter of this year, a new sauce, which should drive its sales next year.
Mr. Jantarach noted that the real reason for the shortage of Huy Fong’s sriracha sauce and its high price could be due to Huy Fong’s legal cases between suppliers and its officers, not the shortage of pepper like what has been told to the market. He pointed out that other producers still have their products displayed in stores.
XO plans to raise its sales in the U.S. to 300 million baht by the end of this year, accounting for around 7.5% of Huy Fong’s market shares. The sauce market in the U.S. has more than 50 billion baht in valuation, thus, reflecting more upside growth to the business.
Mr. Jantarach added that the new factory in Rojna Industrial Estate should begin construction by the first half of next year. However, the company does not have any plans to expand its manufacturing to other countries as XO is proud to have Thailand as its sole origin and to brand its products as ‘Made in Thailand’ also has its own premium feeling to it.