On Monday, the share price of Thai Union Group Public Company Limited (SET: TU) at the time of 11:26 a.m. was at THB 13.20, a THB 0.50 or 3.94% increase with a total trading value of THB 265.53 million.
Kiatnakin Phatra Securities (KKPS) has upgraded its investment recommendation for TU from “Hold” to “Buy”, raising its target price from THB 13.30 to THB 16, noting that the current share price of THB 12.40 offers attractive upside potential.
The analyst firm highlights two central themes for investing in TU: its core business is significantly undervalued relative to its equity stake in i-Tail Corporation Public Company Limited (SET: ITC), and its core operations are set to transition from a performance drag into a primary growth driver moving forward.
TU holds a 79.3% stake in ITC; deducting the value of this holding from TU’s total market capitalization leaves the core business (ex-ITC) valued at approximately THB 7 billion, implying a price-to-earnings (P/E) ratio of just 3.5 times for 2026, despite generating 42% of total net profit in 2025 and a projected 47% in 2028.
The analyst considers the market to be assigning a depressed valuation to TU’s core business while fully reflecting the value of its ITC holdings, creating re-rating potential for the core operations if sustained growth and operational efficiency gains can be demonstrated.
Regarding core business prospects, although frozen seafood and ambient canned seafood segments have entered a mature phase, TU retains growth opportunities through cross-selling across brands alongside cost management and operational efficiency enhancements under its new Chief Financial Officer, including factory utilization optimization, product mix adjustments, and selling, general, and administrative (SG&A) expense reductions.
Driven by these factors, TU’s net profit margin for the ex-ITC business is projected to expand from 1.7% in 2026 to 2.3% in 2028, supporting an average annual earnings per share (EPS) growth rate of 18% per year over the next three years.
At group level, KKPS projects return on assets of 3.7% for 2028, up from 2.6% in 2025. It also increased normalized earnings forecasts for 2026–2028, with the average upward revision put at 16%.
For shareholders, the brokerage forecasts dividend yields of 5.9% for 2026 and 6.7% for 2027. Its earnings outlook implies price-to-earnings multiples declining from 10.02 times to 7.73 times over those respective years.
Furthermore, TU’s estimated free cash flow per share for 2026 is projected at negative THB 0.212, a metric requiring monitoring as it may relate to changes in working capital or capital spending during the period, while the ex-ITC business valuation at a 3.5x P/E ratio remains sensitive to the underlying ITC valuation assumptions used in the model.
