TKN Falls 6%, Analyst Estimates a Decline in 2Q Profit as Chinese Tourists Decreases

As of 12.10 local time in Thailand, the share price of Taokaenoi Food & Marketing Public Company Limited (TKN) was at  ฿11.00/share, dropped ฿0.70, 5.98%. During the session the high of TKN’s share was ฿12.00/share and the lowest was ฿10.80/share with a trading value of ฿482 million.

KTB Securities recommended “BUY” TKN share with the target price of ฿12.40/share and expected a 2Q2019 profit of ฿88 million. KTB stated that 2Q19E net profit to decline YoY but to recover QoQ. a net profit of 2Q2019  would drop 42% YoY due to a result of firstly, a total revenue would decline 4% with domestic revenue to fall 13% given a decrease in Chinese visitors and a slowed consumption improvement, and overseas revenue to rise +3% YoY in view of flat sales in China at THB 470 million, secondly, a gross profit margin would narrow to 30% from 32.2% in 2Q18, and thirdly, SG&A to sales would climb to 22% from 19.8% in 2Q18 on higher marketing expense given a new presenter and aggressive marketing strategy in both domestic and overseas markets.