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Thai Vegetable Oil PCL: Beat our estimate by a mile; robust 2Q21 earnings expected

  • Exceeded our model massively; new high of GM since 4Q16
  • TVO posted a 1Q21 net profit of Bt882m
  • The robust YoY core profit leap was due to higher sales

Our TRADING BUY rating stands, based on anticipated robust YoY earnings growth from 2Q21 through 4Q21, led by sustained high global SB price and a high dividend yield of 7.8% in 2021.

Exceeded our model massively; new high of GM since 4Q16

TVO posted a 1Q21 net profit of Bt882m, up a robust 79% YoY and 89% QoQ. Excluding extra items in 1Q21—Bt32m FX gain, Bt0.7m in reversal of inventory impairment and Bt14m in loss from financial asset impairment—core profit was Bt864m, up 93% YoY and 84% QoQ. Net and core profits exceeded our model by 61% and 54%, thanks to higher sales and GM and lower SG&A expenses than assumed. Sales beat our model by 19%, led by higher sales of soybean meal (SBM) and soybean oil (SBO). GM jumped to 16.3%, which beat our 13.7% estimate (up significantly from 11.9% in 1Q20 and 12.4% in 4Q20).


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