RBF Soars 12%, Topping All Analysts Target Prices as Business Tends to Grow Further

The share price of R&B Food Supply Public Company Limited (RBF) jumped ฿1.40/share or 11.57% to close the morning session at ฿13.50/share on Friday with a trading value of 285 million baht.

RBF was the most gainers in the morning session among SET100, while being the best performer among its peers. SET Index rose 14.27 points or 0.96% to 1,497.25 points in the morning session on Friday.

 

Last week, TRIS Rating assigned the company rating of BBB+ to RBF with a stable rating outlook. The rating reflects RBFs long track record in the food ingredient industry with technical expertise, research and development (R&D) capabilities, continuing growth with diversified and innovative products, and a strong financial profile. These strengths are partially offset by the company’s small earnings base, moderate threat of new entrants in the market, and the risk inherent in overseas investment.

 

Tisco Securities recommended “BUY” on RBF at a target price of ฿11.10/share, expecting the company to record a record high of net profit in 4Q20 around 131 million baht, representing an increase of 32% YoY, buoyed by an increase in domestic production capacity, the business growth in Thailand and lower SG&A.

 

Kasikorn Securities (KS) stated that cannabis indica and cannabis sativa will be the main ingredient to produce CBD oil for medical use, but would take time to grow the plant after the approval. Thus, KS expected cannabis-contained beverage will be trendy in 2022.

BRF, as an upstream and downstream CBD oil producer, would generate upside to its profit in 2022 around 4-11% from producing CBD oil. KS expected an upside around 6-14% to RBF’s current target price at ฿9.40/share.

 

Meanwhile, Finansia Syrus Securities (FSS) expected RBF to record an increase of net profit in 4Q20 by 87% when compared to the previous year due to higher orders without any impact from the Covid-19 outbreak.

As for 2020 and 2021 earnings, FSS estimated an increase of 41% and 22%, respectively, which benefited from the approval of cannabis indica and cannabis sativa that will be finalized in 2H21.

In addition, FSS recommended “BUY” on RBF with a target price at ฿12.00/share.