Our TRADING BUY stands, based on 2H22 core earnings to resume a YoY growth and its valuation unlocking from listing i-Tail in 2H22.
Net and core profits exceeded our model
TU posted a 1Q22 net profit of Bt1.75bn, down 3% YoY and 10% QoQ. Excluding extra items in 1Q22—Bt47m FX loss and Bt77m settlement received from the UK Marine Management Organization on a civil claim launched after John West was found not guilty in 2019—core profit was Bt1.72bn, down 4% YoY and 8% QoQ. Net and core profits beat our model by 9% and 16%, respectively, due to the recognition of the above one-time settlement, a huge tax credit and higher sales than estimated. Sales beat our model by 4% fueled by higher ambient seafood sales than estimated. GM of 17.5% was slightly lower than our 18% estimate (against 17.7% in 1Q21 and 18.6% in 4Q21). RL’s equity loss (excl. lease accounting adjustment) was 710% deeper than modeled.