TFG: Adding Valuation to Asset, Competing for the “Golden Chicken” Title

ThaiFoods Group Public Company Limited (TFG) is the producer of chicken and pork with an interesting backstory of its shares in the Thai stock market.

 

In late 2015, the company fundraised in the stock market, but fell below the IPO price on its first trading day, branded as a stain for all investors. TFG was ranked as one of the worst performers back in those days by posting a loss of 1,574 million baht from the revenue of 17,508 million baht in 2015.

The company stood shakingly in the stock market, until a genius financier named Chirdsak Kukiattinun stepped in to solve the crisis. TFG’s performance started to get better gradually and became the well-known stock today even though Mr. Chirdsak had already left the steering wheel.

 

TFG posted a net profit of 589 million baht in the third quarter of 2019, increased 12.08% when compared to the same period of last year while its total revenue was at 7,534 million baht, slightly lower than the same period of last year by 0.11%.

In the nine-month period, TFG already booked a net profit of 1,312 million baht, which was almost at the same level of the yearly profit of TFG in 2017 at 1,516 million baht and in 2016 at 1,447 million baht while posting two folds higher than its profit in 2018 at 645 million baht.

It can be said that this year could be the most prosperous one for TFG.

The main reason behind TFG’s high profit this year was an increase in chicken and pork prices in the market. Another channel of TFG’s income is from the acquisition of Food Blessing (1988) Company Limited (FBC) in the middle of 2019 at a value of 85 million baht. There are also various marketing strategies that TFG plans to increase its asset valuation.

 

Last month, the company had just invested 330 million baht to sign the deal with Siamraj Public Company Limited (SR) to install a solar floating system in TFG’s factory with an installed capacity of 13 MW.

Not only it will help TFG save the electricity cost, but TFG could also earn an income from feeding electricity as well.

The recent investment was with Energy Absolute Public Company Limited (EA) to install the floating solar in order to generate and sell electricity to TFG and its group companies. This is a starter, and it could be more coming.

 

This has proven that TFG is starting to adapt and expand its business in different fields to avoid the risk of fluctuation in chicken and pork prices that usually goes up and down depending on the season.

If TFG can continuously exert this type of performance, the title of the “Golden Chicken” would be awarded to the company without a doubt.