Ichitan Could Surprise the Market in 3Q23 with 40% Growth Despite Low Season

Ichitan Group PCL (SET: ICHI) is expected to surprise the market as the analyst anticipated a 42.4% YoY net profit growth in 3Q2023 to 273 million baht even though it’s a low season. The analyst recommended investors to ‘Buy on Weakness’ and set ICHI’s target price at 17 baht per share.


An analyst from Yuanta Securities (Thailand) ltd., set ICHI’s target price at 17 baht from P/E ratio assumption at 24.4 and 22.9 for 2023 and 2024, respectively. The analyst still sees more upside as the usual P/E is around 25, which means the stock price could go up for more if ICHI can keep its growth rate.


The analyst expected the increase of U-rate or utilizing rate of its manufacturing capacity to 73% in 3Q2023 from 71% in the previous quarter, citing the high amount of orders, especially on the ready-to-drink green tea in the warmer climate. The limited capacity in Q2 caused the delivery delays which prompted ICHI to increase more manufacturing power by 13.3% at the end of 2024.


The analyst estimated ICHI’s 3Q2023 profit at almost 2.1 billion baht, an increase of 3.3% QoQ and 26% YoY. However, there might be a slowdown from outsourcing which will slightly decrease the initial margin to 22.7%. Still, ICHI is expected to benefit from the economic stimulus from the Thai government as the analyst gave a positive view on ICHI’s 4Q2023 operation.