Is TKN ’s Seaweed Stuck to Investor’s Throat?

Taokaenoi Food & Marketing Public Company Limited (TKN)’s seaweed may stick to investor’s throat now after the report of the second quarter gross profit of TKN, which decreased to 68 million baht, lower 46.7%, from 128 million baht in the same period last year.

This number of TKN’s profit is lower than expected despite the estimation from the market that TKN’s gross profit, at least, will be above 100 million baht.

 

Its sales revenue also lower by 12.8% to 1,267 million baht, compared to 1,454 million baht in the year earlier. This made the gross profit of the first nine month down to 248 million baht, lower by 42.8%, from 434 million baht in the same period of last year. At the same time, the sale revenue of the first nine month down to 3,850 million baht, lower by 4.3% from 4,024 million baht in the year earlier.

The International sales, which was lower by 20% to 719 million baht, was the main reason of this weak performance. Chinese market, which TKN had high hopes for and is account 35% of total sales, reported a decrease in sales revenue by 16.2% .

 

TKN is in the process of changing dealers and distributors. It’s expected that the new dealers and/or distributors can start selling TKN’s products since the fourth quarter of this year.

TKN was also in a cost trap, such as a product development cost, higher marketing cost, expansion to the USA cost and China’s dealer changing cost.

Moreover, The launch of Hinoya, the chicken curry restaurant which had high investment, doesn’t break even. That made the gross profit decreased 19.4% to 341 million baht, from 424 million baht in the year earlier.

 

TKN had to have better cost management, otherwise the profit would be steadily lower.

Investors who hope to see TKN’s prosperity coming back like the past, may have to put that hope aside for now as its outlook in the next 1-2 years may not brighten.

 

Peeradechapan family, the major shareholder of TKN, is still selling stocks, especially Ithipat Peeradechapan or Tycoon Tob, just sold a big lots to make his own profit.

It seems to be really worried for the 13,851 minority shareholders. Can “Tycoon Tob” do anything for them? At least, he should recover investors thrust back before TKN becoming less than a 10 baht share.

If it does so, it won’t be good and will damage the big businessman image, once to be an idol of the new generations.