Thai Vegetable Oil Public Company Limited

Tisco Securities has maintained its buy recommendation on Thai Vegetable Oil Public Company Limited, or TVO, with a fair value of 33.75 baht, and raised its 2026 profit forecast by 16% to 1.2 billion baht, citing a stronger-than-expected gross margin trend. It expects core profit in the third quarter of 2026 at around 750 million baht, up 74% from the same period last year but down 3% from the previous quarter, as soybean costs are expected to remain stable while domestic soybean meal prices are likely to rise by a low single-digit percentage, pushing gross margin above 13%. Management noted that the cost structure of imported soybeans follows an inverted-U shape through the year, with the second and third quarters of 2026 being the periods when the company enjoys a cost advantage, while costs are expected to gradually increase in the fourth quarter of 2026. However, 2026 operating performance is likely to beat the original target, under which the company aimed for total revenue growth of about 15%, while the first half of 2026 grew more than 20% and machinery is running at full capacity. Revenue growth in the first half of 2026 came more from sales volume than from price increases, with soybean meal sales volume up 30% from a year earlier while average selling price fell about 7% and unit costs declined 7-8%. Soybean oil sales volume rose 28%, while average selling price fell 3-6% and costs declined 1%, reflecting that growth came from volume and procurement efficiency rather than temporary margin gains, which Tisco views as more sustainable. For 2027, growth will not be supported by volume because the company has production capacity of 7,000 tonnes per day and a utilisation rate of 99%. Growth will therefore have to come from shifting the product mix from crude oil to refined oil, expanding into higher-margin products, and increasing advertising and promotional spending to raise realised value per tonne. On the next capacity expansion, management estimates investment of about 4.5 to 6.0 billion baht, with a new plant ideally having minimum capacity of about 3,000 tonnes per day, within an optimal range of 2,000 to 5,000 tonnes per day, and investment of around 1.5 to 2.0 million baht per tonne of daily capacity. However, expansion is still constrained by city planning, as the area in Nakhon Pathom province cannot expand capacity under the current city plan, so the company must wait for a new city plan. At the same time, the company is considering options to build a new plant in the central region, without yet disclosing the location, and management views demand as not a major concern and manageable. Tisco also sees a potential profit driver for TVO in 2027 from the El Nino phenomenon, as El Nino normally affects palm oil supply, which could indirectly affect demand for and prices of soybean oil. Meanwhile, risks to Brazilian soybean output could push soybean prices above 13 US dollars per bushel. Tisco maintains its buy rating on TVO using a price-to-earnings ratio of 12.8 times, or minus 0.5 standard deviation versus the five-year historical average. Key risks include lower-than-expected market share, weaker domestic livestock product prices, and a larger-than-expected decline in global soybean prices. Tisco expects a 2026 dividend payout of about 8%, or 2.46 baht per share, compared with a dividend of 0.90 baht per share in the first half of 2026.

Kasikorn Securities recommends buying shares of Thai Vegetable Oil Public Company Limited, or TVO, with a target price of 30 baht, after the company reported normalized profit for the second quarter of fiscal year 2026 at 796 million baht, up 2 percent from a year earlier and 58 percent from the previous quarter. The research team raised its normalized profit forecasts for fiscal years 2026 and 2027 by 14 percent and 10 percent respectively, citing better sales volume, and expects dividend yields of 8.6 percent and 7.0 percent respectively for those years. Management also has a positive view on the short-term outlook and expects third-quarter fiscal 2026 operating results to be similar to the second quarter.

Asia Plus Securities assesses that the global investment landscape is facing challenges on all fronts, amid a sharper-than-expected slowdown in US employment, which fuels hopes that the Federal Reserve will hold its policy rate at the September meeting. Meanwhile, domestic factors are receiving a significant boost from the rapidly strengthening baht, supported by continued foreign inflows into the Thai bond market, with cumulative net purchases this month exceeding 9.2 billion baht. The baht recently touched 32.98 per US dollar. The research team has identified three main industry groups in Thailand that stand to benefit positively from the strong baht. The first group comprises large-cap stocks that are prime targets for foreign fund flows, including commercial banks such as KBANK, SCB, BBL, and KTB; retail and tourism plays like AOT, CPALL, and CRC; telecoms such as ADVANC and TRUE; and construction materials like SCC. The second group consists of companies with high foreign-currency debt or costs, including power and energy firms such as GULF, BGRIM, GPSC, and PTTEP, and airlines like AAV. The third group covers businesses that rely heavily on imported raw materials, including agriculture and food companies such as TFG and TVO. In addition, the research team recommends portfolio strategies to navigate volatility, highlighting safe-haven stocks combined with gold as a hedge, and names SYNTEC, PTT, and GUNKUL as top picks for the Thai stock market, along with LITE01 and ZIJIN80 for overseas investment.