Kiatnakin Phatra Securities (KKPS) wrote in its analysis, expecting Thai Union Group Public Company Limited (SET: TU) to report a 3Q26 net profit of THB 1.27 billion, reflecting a decrease of 2.4% year-on-year but a slight increase of 0.7% quarter-on-quarter—which would bring company’s 9M26 earnings to represent 77% of Kiatnakin’s full-year forecast.
Improved sales and resilient gross margins have helped offset the impact of higher selling, general and administrative expenses and rising raw-material costs. Sales growth remains on track to meet the FY26 target of 4-6%, and gross margin is anticipated to hold above 20% due to a favorable product mix.
For the third quarter, the gross margin is forecast at 20.3%, aligning with management’s guidance of 19.5-20.5% for the year. Segment-wise, ambient product gross profit is expected to show year-on-year improvement, while the frozen segment’s margin might soften slightly because of seasonal factors. The pet care division should maintain a healthy margin, tracking within the 23-25% guidance, supported by premium product offerings.
While higher tuna and freight costs, alongside one-off financial advisory expenses, pose near-term challenges, their overall impact on 3Q26 results is expected to be limited, given two months of inventory, which implies lagged impact from higher tuna costs into Q4.
Meanwhile, favorable conditions, such as the end of the fish aggregating device ban and improved catchability in the Western Pacific Ocean, combined with supportive El Niño conditions, are anticipated to ease tuna prices in 4Q26.
SG&A-to-sales ratio is expected to remain elevated at approximately 14.9% in 3Q26, but is projected to normalize by the year-end as freight and advisory expenses taper off.
From a valuation perspective, Thai Union’s standalone business is trading below 3x 2027 P/E and offers an attractive dividend yield of around 6%. The company has multiple levers for earnings growth, including the expected easing of tuna costs, better catch rates, and ongoing efficiency initiatives. As a result, Kiatnakin maintains a ‘Buy’ rating, with a target price of THB 16.00 per share.
