‘Thai Union’ to Show Solid Performance in 2H23 as Prices Are Attractive to Target of THB19.40

Thai Union is expecting to see a recovery in its seafood business as many see the company’s weak performance in recent quarters has bottomed out and should bounce back especially in 2024.

Customs-based exports for Thailand fell 6.2% in July from the same period last year. The reading exceeded a forecast for a 0.75% drop in a Reuters poll and slightly better than a 6.4% fall in June. Exports of agricultural products fell 7.7% YoY and food products dropped 11.8%.

Even though canned seafood declined 12.9% in July, marking its seven straight contractions, the pace showed a slower drop when compared to the previous month. Surprisingly, canned tuna showed some growth from June, which was in line with the statement from TU’s executive that anticipated a recovery starting 2Q23.


Recent analysis showed that analysts remained positive on TU’s business outlook as 18 brokerage firms after the 2Q23 earnings report had reviewed and made 14 ‘BUY’ recommendations while four others recommended ‘HOLD’.

The most recent research papers are from Yuanta Securities and KGI Securities, which both recommended ‘BUY’ on Thai Union stocks.

Yuanta Securities (Yuanta) stated that it has a positive outlook on TU’s growth in the long-term, expecting earnings to gradually recover HoH in 2H23 and should record growth (YoY).

Yuanta saw that the current share price is still low, trading at PER 2024 at 10.6x. The stocks are under-owned from foreign investors, posting a limited downside risk to TU. Yuanta recommended ‘BUY’ as the result from cost reduction led the firm to come up with a target price at THB15.90 per share.

Meanwhile, KGI Securities (KGI) initiated coverage on TU with an Outperform rating and a 2024 target price of THB19.40, based on PER 15.2x (long-term average PER). TU has a competitive advantage from its large production volume and integrated value chain. The company’s effort to expand beyond traditional seafood should be a major growth driver going forward.

KGI expected a significant recovery in earnings in 2H23F-2024F. Next year, growth would be backed by the recovery in pet care business and moderate growth in ambient and value-added business. Meanwhile, TU’s cheap valuation (2024F 11.2x PER and 0.8x PBV) and attractive dividend yield should act as a cushion for the share price.