NRF Falls Further after Breaking Most Analysts Target Prices amid Hemp-Business Momentum

The share price of NR Instant Produce Public Company Limited (NRF) fell for the third trading day after a rally of 72% this year to set a record high at Bt10.70 on March 23, 2021, with a kick from a hemp-infused business.

 

As of the closing in the morning session on April 7, 2021, NRF had dropped 10% from Bt10.40 on April 2 to Bt9.35 per share.

NRF is among one of the red-hot stocks that got boosted by announcing new hemp-infused products, which is something new to the society after the FDA approved uses of hemp not long ago.

 

However, the share price surged and broke new highs after new highs after the announcement, resulting in a share price rally above most target prices given by analysts.

 

Capital Nomura Securities (CNS) gave a target price for NRF at Bt9.00 per share with a trading-buy recommendation.

SCB Securities (SCBS) gave a target price at Bt8.50 per share with a neutral outlook.

Bualuang Securities (BLS) gave a target price at Bt10.00 per share with a buy recommendation.

 

On the other hand, Maybank Kim Eng gave the highest target price at Bt11.00 per share with a “BUY” recommendation, stating that NRF’s earnings outlook is expected to grow strongly in the 2021-22 period (3-year average profit is expected to reach 44% CAGR), with the ethnic food combined with megatrends such as plant-based and e-commerce that achieve growth faster-than-expected. NRF also has upside risk from hemp business with potential partners.

The current Relative Strength Index (RSI) of NRF is 55.88 points.

 

For the year 2020, NRF reported net profit of 124 million baht, an increase of 205.25% from the year 2019, while consolidated operating revenue was 1,408 million baht, increased by 297 million baht or 26.7% mainly due to higher demand in ready-to-eat, recipe mix, and beverages for Ethnic Food products and higher order volumes of konjac and jackfruit Plant-based products from existing customers in all regions.

Gross profit margin was 30.8% increased from 29.4% due to product mix adjustments to higher-margin Ethnic Food products and increase in plant-based food product and functional product sales. EBITDA Margin was 21.0%, improved from 17.1% mainly due to improved cost control and higher revenues.

Normalized Net profit was 252 million baht increased by 69 million baht or 37.7%, mainly due to the strong operating revenues performance, improved margins product mix adjustment and better cost management.

As of 31 December 2020, the total liabilities of NRF were 784 million baht, decreased by 639 million baht or 44.9% from 31 December 2019 mainly due to long-term Loan, net of current portion and short-term loan.