Despite the 2022 earnings cut due to lowered GM and sales expectations, we still recommend BUY on TFM, based on the strong 2H22 earnings jump (prompted by a huge drop in raw material costs).
Undershot our estimate significantly
TFM posted a net profit for 4Q21 of Bt39m, down 44% YoY and 43% QoQ. Excluding extra items in 4Q21—Bt1m in net FX gain and Bt10m in reversal of asset write-off—core profit was Bt29m, down 59% YoY and 66% QoQ. Net and core profits undershot our model by 44% and 63%, respectively, due to lower sales and GM than modeled. Sales were 16% short of our model, led by lower-than-estimated fish feed volumes. GM was 9.4% in 4Q21, below our 12% estimate and 14.3% in 4Q20 and 11.5% in 3Q21. Gross profit and after-tax profit missed our forecasts by 35% and 67%, respectively. It paid Bt0.15/share DPS (Bt75m) for 2H21 or at a 68.9% payout ratio of 2H21 consolidated profit.