On Monday at 2:31 PM (Bangkok time), the share price of Thai Union Group Public Company Limited (SET: TU) increased by 2.46% or THB 0.30 to THB 12.50, with a trading value of THB 265.41 million.
Finansia Syrus Securities (FSS) wrote that TU reported a net profit of THB 1.26 billion for the second quarter of 2026. This result represents a 13.5% increase quarter-on-quarter but a 0.7% decrease year-on-year, surpassing the brokerage’s forecast by 13%.
Finansia suspects this outperformance may be attributed to a refund item, similar to what was observed with i-Tail Corporation (SET: ITC). The brokerage is currently inquiring about the details of the refund, particularly how it has impacted both revenue and costs in the quarter, as TU has not disclosed this information in its report.
The analyst also highlighted recognized special items, including a foreign exchange loss of THB 71 million and a gain on investment sales of THB 35.2 million. Revenue from Ambient and Frozen segments performed well, improving quarter-on-quarter, while the Pet Care segment saw a sequential decline, aligning with the trend observed for ITC.
Gross profit margin reached 21.4%, up from 18.2% in 1Q26 and 19.7% in 2Q25, with improvements noted across all segments—Ambient, Frozen, and Pet Care. However, Finansia cautioned that if the refund item is excluded, the figure would likely be lower. Operating expenses also rose, mainly due to higher transportation costs, pushing the selling, general, and administrative expenses to sales ratio up to 15%, compared to 14.5% in 1Q26 and 13.9% in 2Q25.
Furthermore, the company has revised its full-year 2026 targets, raising the expected revenue growth to 4-6% year-on-year (from a previous target of 3-4%) and gross profit margin guidance to 19.5-20.5% (from 19-20%). TU also announced a first-half 2026 dividend payment of THB 0.40 per share (a 65% payout ratio), translating to a yield of 3.3%, with the ex-dividend date set for August 14.
Kasikorn Securities (KS) stated that TU’s 2Q26 net profit of THB 1.3 billion beat their expectations by 6% and exceeded the consensus estimate by 11%, primarily on better-than-expected gross margins. Sales increased 1% year-on-year to THB 33.8 billion, supported by organic sales growth of 1.5% and volume growth of 1.9% year-on-year.
Ambient sales grew 2% year-on-year to THB 16.9 billion, driven by a 4.4% volume increase from stronger OEM demand and seasonal promotions in Europe. The ambient gross margin reached a record 23.8%, up 180 basis points year-on-year and 450 basis points quarter-on-quarter, benefiting from favorable pricing and improved utilization.
In the Frozen segment, sales remained flat year-on-year at THB 10 billion. Price increases due to shrimp tariffs were offset by weakness in other areas, driven by a 5% decline in volume amid softer U.S. demand. Nevertheless, the frozen gross margin improved to 13.5% (up 180 basis points year-on-year and 220 basis points quarter-on-quarter), supported by favorable shrimp costs and price adjustments.
Pet Care sales grew 2% year-on-year to THB 4.5 billion, with the normalized gross margin at 24% (down 100 basis points year-on-year and 30 basis points quarter-on-quarter), excluding the impact of tariff refunds. Value-added product sales grew 6% year-on-year to THB 2.5 billion on the back of a 7.4% increase in volumes, although the gross margin declined 420 basis points year-on-year to 22.1% due to an unfavorable ready-to-eat product mix.
Overall, the company achieved a record-high gross margin of 21.4% (up 170 basis points year-on-year and 320 basis points quarter-on-quarter), surpassing the full-year target, driven mainly by strong performances in ambient and frozen segments. SG&A expenses as a proportion of sales rose to 15% (up 110 basis points year-on-year and 50 basis points quarter-on-quarter), with overall SG&A up 9% year-on-year due to increased freight, marketing, and tariff-related expenses.
TU reported a foreign exchange loss of THB 71 million, other income rose 29% to THB 229 million, share of profit from associates fell 6% to THB 148 million, finance costs declined 2% to THB 576 million, and tax expenses surged 61% to THB 337 million.
Kasikorn noted that TU revised its full-year 2026 guidance, increasing expected sales growth to 4-6% (from 3-4%), gross profit margin to 19.5-20.5% (from 19-20%), and reduced CAPEX to THB 5-5.5 billion (from THB 5.5-6 billion), while keeping the SG&A to sales target unchanged at 13.5-14.5%. The company declared an interim dividend of THB 0.40 per share (65% payout ratio and a 1H26 yield of 3.3%) with an ex-dividend date of August 14 and payment set for August 28, 2026.
Following these, Kasikorn maintains a ‘Neutral’ rating on TU with a target price of THB 13.90 per share, and noted that the company will hold a post-results analyst meeting on Tuesday to provide further details on 2Q26 operations and the revised 2026 outlook.
