Earnings Report /
Thailand

Thai Vegetable Oil PCL: Beat estimates by a lot; YoY weaker 2Q22 core profit expected

  • Exceeded our model significantly

  • TVO posted a 1Q22 net profit of Bt661m

  • We model a Bt600m 2Q22 core profit, down 18% YoY

Prasit Sujiravorakul
Prasit Sujiravorakul

Equity Research Analyst

Bualuang Securities
17 May 2022

Our HOLD rating stands for a 6-7% dividend yield. We expect global SB price to drop to $13-15/bushel in 2H22 (from $15-18/bushel in 1H22). We revised down 1H22 SB price from $17-20/bushel to $15-18/bushel. Due to the falling SB price in 2H22-23, GM will normalize to 8-10%.

Exceeded our model significantly

TVO posted a 1Q22 net profit of Bt661m, down 25% YoY but up 566% QoQ. Excluding extra items in 1Q22—Bt65m in net FX gain, Bt39m in reversal of inventory impairment expense and Bt5m in financial asset impairment—core profit was Bt563m, down 35% YoY but up 1,033% QoQ. Net and core profits beat our estimates by 84% and 71%, respectively, due to higher sales and GM and lower SG&A expenses than modeled. Sales were 12% above our model. GM of 9.8% in 1Q22 beat our 8.6% estimate (and against 16.3% in 1Q21 and 2.2% in 4Q21).