TU rose 4.79% or increased 0.80 baht to 17.50 baht, trading value 503.09 million baht at 10.28 a.m. from the opening price of 17.40 baht, the highest price 17.60 baht, the lowest price 17.20 baht.
Mr. Wichit Arayapisit, senior director and investment strategist, Research Department, Maybank Securities (Thailand), said the share price of Thai Union Group Public Company Limited (TU) has risen. Expected to respond to the news that the Securities and Exchange Commission (SEC) has counted one application form for an offer to sell securities. and the filing form of i-Tel Corporation Plc. (ITC), which operates the Pet Food business yesterday.
As for ITC, it is a major producer and exporter of pet food. and is the leading OEM business in the production of cat and dog food in Thailand. It is also the No. 2 pet food producer in Asia and one of the top 10 pet food producers in the world.
However, this business is viewed as a business with a great future. It is expected to support TU’s performance to grow significantly in the future.
While TU’s core business still has good growth prospects. The 3Q22 performance is expected to benefit from exports and the weakening baht to support. As for the current share price, it doesn’t look very expensive and there is still room to play. Suggest “speculation” to the target price of 18.00 baht. If the share price can stand above 17.70 baht, it will open a channel for rebounds again.
Bualuang Securities indicated in its analysis, suggesting “speculation” that TU shares give a target price of 22.50 baht, driven by better profits in the second half and the listing of ITC on the stock market.
TU’s earnings are expected to improve slightly in the second half. This was driven by a better gross margin (GM) to 18-18.5% (up from 17.5% in H1/65) from the strong GM of the pet food segment, as well as the better GM of the frozen food and seafood segment. The rising tuna price in Q3/22 is seasonal. But it is expected to decrease in Q4/65 and if it stays at no more than 1,800 USD/ton. or close to the current level It will be a point that is still manageable and price adjustments can be negotiated with customers.
As for Red lobster (RL), management estimates earnings should improve and break-even within the next 12 months. This was driven by higher selling prices in the second half and a corporate restructuring. However, we remain conservatively forecasting a share loss of around Bt305 million in 2023 (down from Bt1.05bn in 2022).