FSSIA Expects Strong Performance from ICHI as Net Profit Could Surge 55% in 2023

The stock of famous bottled tea producer, Ichitan Group (SET: ICHI) once peaked last August at THB 17.50, marking the highest price in eight years, but has been dropping down ever since.

The share price closed at THB 15.90 on Wednesday after falling nearly 10% from its previous high.


However, an analyst from FSSIA (Finansia International Investment Advisory) believed the company will bring a solid operation result in next three quarters, while upgrading ICHI rating to BUY with a target price at THB 19 and P/E ratio of 23, citing a change in consumer behavior in Q3 and hotter temperature than normal despite a rainy season. Moreover, the company has a higher utilization rate of 73% from 71% in 2Q with stabilized packaging costs.


FSSIA estimated ICHI’s 3Q23 revenue to be a 10-year high at THB 2.06 billion (+2% QoQ, +24YoY), citing the increasing demand of the most popular 500 ml ready-to-drink (RTD) honey lemon tea.

FSSIA also expected SG&A to sales ratio will drop to 7.2% and the recovery of Indonesia JV’s profit sharing to THB 5 million or 5 times of last quarter but only one-fourth of 3Q22. The analyst believed ICHI’s Indonesia market strategy could be adjusted.


FSSIA estimated ICHI’s 3Q23 net profit to break seasonal trend and an 8-year high at THB 273 million (+6.6% QoQ, +42% YoY).

The analyst believed RTD green tea could offset Tansansu and OEM missed revenue and revised ICHI’s net profit up by 22.7% in 2023 and 19.6% in 2024 to grow 55.7% and 7.3%, respectively. FSSIA noted that ICHI plans to increase further production by 13% to 1.7 billion bottles within this year and will outsource 6% of its production to OEM starting the first quarter next year.