TU: Hitting a Momentum-Shifting Blockage

Investors are aghast at the declining share price of Thai Union Public Company Limited (SET: TU) for more than 10% in the past week even though the company still has a strong outlook on its main businesses in the U.S. and Europe are going well with gradual recovery, not to mention the baht depreciation.

The momentum was derailed after the company is expected to record two extraordinary items in 2Q22, which are the loss around 250 million baht from closing Rugen Fisch, a canning factory in Germany, and an accounting adjustment for a loss of 600 million baht in preferred shares of Red Lobster.

Investors had been speculating on the losses since before the downfall, but the decline came after the amount of losses had been revealed, which could potentially have a great impact on TU’s bottomline in 2Q22 earnings statement. The sudden change has shifted the outlook of TU in a brink of an eye, crashing hopes to see another historic high in revenue after hitting a record high in 1Q22 at 36,272 million baht.


This could happen as consensus from Refinitiv estimated the company to record 38,683 million baht of revenue in 2Q22. However, net profit would drop to 1,247 million baht for the quarter. Earnings per share are expected to decline 45.41% to THB0.27, compared to THB0.37 in 1Q22 and THB0.49 in 2Q21.

The consensus target price of TU remained high at THB20.78 per share, but recommendations are now splitted to 8 buys and 8 holds without a recommendation to sell.

TU closed the morning session on July 7, 2022, at THB15.40 per share, increased THB0.20 or 1.32%.