Yuanta Securities (Thailand) has issued an updated analysis for Thai Coconut Public Company Limited (SET: COCOCO), expecting subdued earnings in the fourth quarter of 2025, but seeing that the market has largely priced in these negatives.
The company is forecast to report a normalized profit of THB 29 million in 4Q25, a sharp decline of 57.7% quarter-on-quarter and 59.4% year-on-year, with total revenue anticipated at THB 1.57 billion, or a 10.5% decrease quarter-on-quarter and down 9.1% year-on-year. This is attributed to seasonally low sales and continued weakness in coconut water demand from China, which has not been offset by growth in the U.S. and Thai markets.
The gross profit margin (GPM) is expected to contract sequentially due to a lower utilization rate. However, it is projected to expand year-on-year for the first time, reflecting the benefits of lower coconut prices being realized. Selling, general, and administrative expenses (SG&A) as a proportion of sales are expected to rise both quarterly and yearly, as the company continues its strategy of showcasing products overseas.
Based on Yuanta’s projections, if results align with expectations, 2025’s full-year normalized profit would stand at THB 224 million, down 68.8% from the previous year. Nevertheless, the stock price has already dropped 25.6% over the last six months, suggesting that most of the negatives have been incorporated into the valuation.
Looking ahead, Yuanta expresses increasing optimism about COCOCO’s outlook in 1Q26. Even under a pessimistic scenario where Chinese sales remain sluggish, the firm forecasts both quarterly and yearly profit growth, supported by a GPM recovery to 20%, as the lower coconut price impact is absorbed throughout the entire quarter. The company’s cost-cutting initiatives are also expected to drive down SG&A expenses, with normalized profit for the quarter projected in the range of THB 70–80 million.
Yuanta has raised its 2026 normalized profit estimate for COCOCO by 10.5% to THB 544 million, representing 142.6% year-on-year growth. The upward revision is based on assumptions of higher GPM, stricter SG&A controls, and a more favorable valuation multiple (PER increased to 18.3x from 17.5x, or -1 SD below COCOCO’s historical PE band since IPO). The new target price is set at THB 6.90, offering 19% upside from current levels, and the recommendation has been upgraded from ‘Trading’ to ‘Buy.’
Despite Yuanta’s conservative revenue growth assumptions—which currently forecast only a 9.5% year-on-year increase—there are potential near-term catalysts. Notably, COCOCO plans to announce its 2026 revenue and GPM targets at the SET Opportunity Day event on March 10, 2026. If management sets more ambitious goals than forecast, the analyst notes there could be upside revisions ahead.
Additionally, while COCOCO has announced plans for a debenture issue of up to THB 900 million for working capital, debt repayment, and affiliate lending—which may increase financing costs—Yuanta views this as a secondary issue compared to the positive catalysts on the horizon.
Yuanta noted that key factors that could impact the target price include volatility in raw material prices and exchange rates, shifting consumer behavior, the threat of substitute products, and heightened industry competition.
