XO updates the export sauce situation in Q2/64, moving forward on target Although there was a container shortage during the quarter, the problem was now resolved and the cargo was exported as planned. While the overall numbers look good. because of the sauce products which is the main product group with a continuous high production rate analytical aspect KTBST Securities stated that XO is still outstanding, with a target price of 26 baht, as demand for seasoning sauces can continue to expand until next year. From the cost price lock strategy The gross margin will still be able to stay high.
Mr. Jittiporn Chantrat, Managing Director of Exotic Food Public Company Limited or XO, manufacturer and distributor of seasoning sauces, sauces, as well as Thai curry pastes, revealed that the direction of the export situation in the second quarter of 2021 work through from continuous market expansion At the beginning of the second quarter, the company had orders in hand waiting for delivery of approximately 450 million baht. Support to ensure that the overall performance of the business is in good condition. Even on the way there is a shortage of containers. But now the company Received complete cabinets and exported as planned. Support the trend of operating results to be able to achieve the All Time High as the target again. The direction of the first half of the year is good. There is an opportunity to propose to the board meeting to consider the interim dividend payment at a continuous high rate.
However, the company has taken into account safety. and care about the health of all employees Therefore campaigning for employees to receive vaccinations as much as possible. And now have been 100% vaccinated to create safety for the organization. and build confidence in continuing to expand the business in the future
In terms of analysis, KTB Securities (Thailand) states that XO’s performance hit a new record as expected. Estimated profit in 2Q21E to hit a new record as expected, growing +44% compared to the same period last year (YoY). Recommend “BUY” with a target price of Bt26.00 based on 2021E PER of 23x (equivalent to 5-yr average PER). Neutral view from group conference call held on 15 Jul. ’21 with the following key points: 1) The company has sales Sell 2Q21E up to 400 million baht, representing 89% of the backlog of 450 million baht, which is the highest quarterly sales the company has ever achieved, and a utilization rate of 80%, up from 70% in 1Q21. Currently paying about 50 listing fees. % from the budget set for 10-15 million baht
2) The outlook for 3Q21E sales is still in a good trend. At present, sales until the end of August 21 are around 300-350 million baht. In addition, hemp products are expected to have sales that will come in late 3Q21E, about 3 million baht, which the company has seen the demand for cannabis products. The brew is twice as high as the sales when the new product is released.
3) There is a plan to expand 1 additional production line, expected to spend around 100 million baht and will be able to start the production line in late 2Q22E, which will increase sales by 600-700 million baht per year, expect profit in 2Q21E Highest record at 132 million baht (+44% YoY, +26% QoQ). We estimate 2Q21E profit of 132 million baht (+44% YoY, +26% QoQ). Total 2Q21E revenue is 420 million baht (+24% YoY, +19% QoQ) and gross profit margin is expected to be close to 1Q21 at 45% (1Q21 = 45.5%, 2Q20 = 41.8%) as a result of locking in cost prices throughout the year. It is believed that the company will be able to solve the transportation problem. (Ships and Containers)
Maintain net profit in 2021E to grow 52% YoY Maintain net profit in 2021E at Bt484 million (+52% YoY) We estimate that sauce revenue in 2021E will grow +30% YoY and maintain our 2021E gross profit margin assumption. at 45% on production costs with some cost locks going through 2022E In addition, sales from the new strategy listing fee started to see sales coming in since 1Q21, which was faster than we expected at 3Q21E and Earnings forecasts also include upside from hemp products. At present, it is still waiting for legal clarity from the FDA.
Meanwhile, XO’s valuation is Bt26.00 based on 2021E PER of 23x (equivalent to 5-year average PER). XO is currently trading at 2021E PER at 17x and has a growth EPS CAGR (2020-2022E) of 31.4%, our estimate. Target price PER of 23x is suitable from Demand for seasoning products can continue to grow through 2022E thanks to the new strategy and the company has already locked costs until next year. And gross profit margin (Gross Profit Margin) will remain high and cause EPS CAGR (2020-2022E) to continue expanding at 31.4%, above the historical average of 24%.