Thai Union Group Public Company Limited (SET: TU) addressed several crucial developments at a recent management update, including Mitsubishi Corporation’s increasing involvement, the impact of new U.S. import tariffs, updated financial forecasts, and a revised business strategy, according to Tisco Securities in its exclusive talk summary with the company.
3Q25 Earnings and Full-Year Outlook
Tisco Securities noted that the seafood producer will release its third-quarter results on 4 November 2025. Management expects a modest sequential pickup in revenue as ambient seafood order flows gradually normalize after disruptions triggered by tariff uncertainties. Gross margin is predicted to remain steady, backed by lower average fish prices—approximately US$1,550 per ton, slightly below the company’s yearly target. TU has extended its raw material inventory period to lock in these favorable prices. Meanwhile, SG&A expenses are projected to stay flat compared to the previous quarter, with reduced transformation costs counterbalanced by a ramp-up in brand marketing.
For 2025, TU lowered its annual revenue guidance to a 1-2% year-over-year decline, a slight improvement from the 8% drop observed during the first half. The company anticipates stronger order volumes as clients resume purchasing following tariff resolution and as currency headwinds ease. Marketing expenditure for branded goods will rise to 5% of sales from a previous 3%. TU forecasts transformation costs at roughly 0.7% of revenue this year, expecting these initiatives to yield benefits from 2026.
U.S. Import Tariffs and Production Strategy
TU estimates that new U.S. tariffs—set at 19%—will only modestly lift shelf prices by 6–7%. This is because tariffs are applied to the free-on-board (FOB) value, rather than the final retail price, and costs will be absorbed across the supply chain. The full effect will become apparent from the fourth quarter onward, as older shipments fall under previous tariff regimes. TU is now resuming a more proactive approach in the U.S. market given the regulatory clarity.
Thailand continues as TU’s primary export base due to competitive costs, with its Ghana facility now operational and the Seychelles plant pending FDA approval in early 4Q25. The company intends to focus on flexible production adjustments rather than major capacity expansion.
Profit Forecast and Investment Recommendation
Core profit for the first half of 2025 fell 9% year-on-year, representing half of the full-year estimate. The group’s 2025 net profit is forecast at THB 4.4 billion, down 12% from last year, reflecting softer demand and tariff headwinds. However, TU is expected to rebound strongly in 2026, with net earnings predicted to climb 16% and margins narrowing due to anticipated tuna price increases. Higher marketing outlays and logistical costs are expected, while the effective tax rate is seen at about 12%.
Given reduced tariff risk and Mitsubishi Corporation’s increasing stake, Tisco Securities has upgraded TU to “BUY” and raised the 2026 target price to THB 15.30. Risks to the outlook include a potential global economic slowdown and heightened bargaining pressures from clients due to increased U.S. tariffs.
