#ThanHoon – Maybank Securities (Thailand) shines on BJC or Berli Jucker Public Company Limited stocks, noting Profit will be driven by consumption and tourism. The research department maintains a BUY recommendation on BJC, believing that the recovery in consumption and tourism The content of the election will have a positive impact on the packaging business, consumer goods business and Big C business.
While the gross profit margin tends to increase in line with increasing sales. Also the cost Less energy and raw materials This year’s earnings are expected to grow 15% YoY The stock is trading at a PE of 25.9x or -1 SD with 20% upside to a target price of Bt44.25 (DCF, WACC 7.2% , G.3%).
** Big C will grow in sales and rental income.
Research forecasts Big C’s SSSG this year at 7% driven by consumption and tourism growth. Tourism-related sectors, which accounted for 25% of Big C’s sales in Q4/2022, recovered strongly. This year, three supermarkets will be opened, 12-13 supermarkets/wholesale stores and 200 Mini Big C branches.
We expect gross profit to increase 60 bps YoY to 17.7% from increasing the share of high margin products and increasing house brand to almost 16% from 14.9% in 2022, as well as increasing efficiency in logistics. Rental income Expected to increase 12% YoY to Bt10bn, or 87% of rental income. Before COVID, Big C’s occupancy rate is expected to increase to 90% from 88.2% in 2022.
** Sales and profit margins of the packaging group are likely to increase.
Packaging sales are expected to continue to grow well as a result of a recovery in consumption. in Thailand and Vietnam along with the trend of using environmentally friendly packaging that is Including the production of light glass bottles and new aluminum cans.
While BJC’s customers in the food and beverage group tend to experience a recovery in both domestic and export sales. Energy and raw material costs are expected to fall in line with weaker natural gas and aluminum prices The consumer goods group also benefited from a recovery in consumption Including new product launches and lower raw material costs.
**Profits this year are expected to grow by 15% from all business groups.
The research department estimates that sales will increase by 12% to 169 billion baht in 2023 from the growth of all business groups, be it Big C, packaging group, consumer products and medical equipment group and pharmaceutical group. Gross profit is expected to increase by 70 bps YoY to 19.1% from packaging and consumer products sectors Big C. in terms of expected expenses it is expected to increase to 20.2% from 19.9% in 2022 from electricity and electricity costs However, the research department expects profit this year to grow 15% YoY to 5.7 billion baht.
The research department maintains a BUY recommendation with a 2023 target price of 44.25 baht **