The share price of Exotic Food Public Company Limited (XO) rose ฿0.30/share or 2.29% to close at ฿13.40/share on Feb 5, 2021, with a trading value of 79 million baht.
KTBST Securities maintained a “BUY” rating on XO with a target price of Bt16.00, which is pegged to 2021E PER of 18x. This implies -0.5 SD below its 5-yr average. XO’s shares currently trade at 2021E PER of 11.5x, which is well below its peer NRF’s 45x, although XO’s 2022E EPS is estimated to grow 7.5% (below its peer).
Earnings riding an uptrend from 2Q20. XO’s net profit has returned to the path to growth from 2Q20 with net profit hitting Bt90.0mn per quarter. Further, gross profit margin has trended up on the back of economies of scale, as revenue from its sauce products, which provide a relatively higher profit margin compared to other products, increased significantly +20% QoQ in 2Q20.
4Q20E net profit to feel the pain from container shortage. KTBST forecasted 4Q20E net profit will decline -19.7% QoQ to Bt78.0mn, as total revenue will fall -8% QoQ to Bt317mn due to a delay in exports given a shortage of containers. The shipping process currently takes 4-6 weeks from 1-2 weeks earlier.
2020E net profit to skyrocket +157%, 2021E net profit to grow a further +19%. KTBST estimated 2020E net profit at Bt314mn, which indicates a strong growth of +157%. In 2021E, net profit is estimated to grow a further +19% to Bt373mn.