At the end of the morning session on Monday, the share price of Osotspa Public Company Limited (SET: OSP) gained 2.63% or THB 0.40 to THB 15.60, with a trading value of THB 124.94 million.
Yuanta Securities (Thailand) estimates OSP’s normalized profit for the first quarter of 2026 to range between THB 1.00-1.05 billion, reflecting growth both quarter-on-quarter (QoQ) and year-on-year (YoY).
Revenue is projected to recover on a QoQ basis, largely supported by seasonal factors as the business enters the summer period. However, the figure is expected to decline by 5-9% YoY due to weaker export sales.
This decrease is attributed to disruptions in Cambodia and Indonesia caused by conflicts and war, which have led to delays in logistics and transportation. Additionally, revenue from Myanmar is also anticipated to decline, impacted by issues related to import licensing.
Meanwhile, domestic revenue is expected to grow by 5-7% YoY, driven by an increase in energy drink sales from a low base in the previous year, as a result of the restructuring of the distribution network in traditional trade channels.
Gross profit margin (GPM) is expected to expand both QoQ and YoY, supported by lower production costs, as OSP has locked in lower-priced raw materials through May, which are more favorable compared to last year’s levels.
Further margin improvement is projected to come from the consolidation of energy drink manufacturing at a single site in Ayutthaya, as well as from a decrease in selling, general, and administrative expenses (SG&A) as a percentage of sales on both a QoQ and YoY basis.
Looking into the second quarter of 2026, normalized profit is expected to continue growing YoY, even though total revenue may remain under pressure due to persistently weak international sales. This impact is expected to be offset by effective management of GPM and net profit margin (NPM), both of which are forecast to maintain a positive trend.
Raw material costs in the second quarter are anticipated to remain stable relative to the first quarter, given the company’s hedging of input prices. While transportation costs may see a slight increase, they are expected to remain manageable.
However, there is potential for rising raw material costs to exert downward pressure on GPM in the second half of 2026. This has prompted Yuanta to consider slightly revising down its normalized profit forecasts for 2026-2027 as a precautionary measure.
With the current share price offering further upside, the brokerage maintains a ‘Buy’ recommendation for OSP, with a preliminary new target price in the range of THB 18.00-19.00 per share.
