Introduction
This in‐depth report provides a comprehensive analysis of Berli Jucker Public Co Ltd (BJC TB), a conglomerate with diversified operations across the packaging supply chain, consumer supply chain, healthcare and technical supply chains, and modern retail supply chain. The report, issued by UOB Kay Hian, details the company’s Q4 2024 performance, key financial metrics, detailed profit & loss trends, balance sheet snapshots, cash flow dynamics, and an outlook focused on improved earnings and core profit growth in 2025. Alongside an engaging breakdown of market data and operational highlights, the recommendation remains to Maintain BUY with a target price of Bt28.00.
Company Overview
Berli Jucker is positioned as a leading conglomerate in various supply chains. Its operations span diverse segments including:
- Packaging Supply Chain: Supporting the packaging needs across numerous industries.
- Consumer Supply Chain: Catering to consumer goods along with related delivery channels.
- Healthcare & Technical Supply Chains: Enabling efficiency in healthcare logistics and technical components.
- Modern Retail Supply Chain: Integrating modern retail distribution channels with state-of-the-art processes.
The firm has successfully positioned itself in a dynamic market, underpinned by robust financial and operational strategies that are finely tuned to current market trends.
Stock Data and Market Position
Berli Jucker is classified in the Consumer Staples GICS sector with a Bloomberg ticker of BJC TB. The company has issued about 4,007.8 million shares, with a market capitalization of Bt89,774.7 million (approximately US\$m 2,640.4). Trading activity shows a 3‐month average daily turnover of about US\$m 2.5, while the price performance indicated a 52-week range between Bt19.20 and Bt26.25. Along with buoyant market sentiment, major shareholders include TCC Corporation with 45.68% and TCC Holding (1995) with 29.32% stakes. The company’s FY24 net asset value (NAV) per share stands at Bt30.07, although it is burdened with a net debt/share of Bt39.59.
Q4 2024 Financial Results
The report outlines the 4Q24 performances, demonstrating that the results were in line with market expectations despite a few notable challenges:
- Core Earnings & Net Profit: The core earnings for Q4 2024 were recorded at Bt1.57 billion, a decline of 8.8% year-on-year due to a higher effective tax rate. However, net profit posted at Bt1.64 billion, showing a modest increase of 0.4% year-on-year and a significant quarter-on-quarter surge of 134.5%, largely driven by seasonal factors.
- EBT Improvement: Earnings Before Tax (EBT) witnessed a healthy improvement, escalating by 21% year-on-year as a result of enhanced top-line performance and improved profitability metrics.
- Margin Expansion: The gross profit margin improved from 20.2% in Q4 2023 to 21.0% in Q4 2024. Simultaneously, SG&A expenses as a percentage of sales declined slightly, indicating better cost management even with a slight dip observed in the core profit margin.
- Top-line & SSS Growth: Sales and services registered 2.4% year-on-year growth. Key drivers include the modern trade business, healthcare supply chain, and packaging supply chain, while same-store sales (SSS) grew by 2.2% year-on-year – bolstered by strong performance in fresh food products despite pressure on the consumer supply chain from a stronger Thai baht.
Key Financial Metrics and Projections
The report lays out a detailed forecast over the next few years with promising trends for 2025 and beyond:
- Revenue and Earnings: Net turnover is anticipated to grow from Bt170,814 million in 2024 to Bt179,643 million in 2025, followed by consistent increases in subsequent years. EBITDA, operating profit, and net profit are expected to reflect a gradual improvement, with net profit growing from Bt4,001 million in 2024 to Bt5,089 million in 2025.
- Valuation: The projected CAGR in earnings has led the analysts to peg the 2025 target price at 21x 2025F PE, equivalent to -1 standard deviation from a five-year mean (excluding the COVID-19 period), underscoring a moderated earnings growth relative to grocery retailer peers.
- EPS and Multiple Outlook: Earnings per share are forecasted at Bt1.3 for 2025, with corresponding PE multiples trending downwards from 19.3x in 2024 to an estimated 17.6x in 2025. Other key multiples, such as the EV/EBITDA ratio, are projected to remain comfortable at around 10.7x for 2025.
- Dividend & Leverage: Dividend yields are expected to hover around 3.6% for 2025. The company’s debt to equity ratios and interest cover ratios remain robust, reflecting solid leverage management and an improving operational cash flow profile.
Profitability and Margin Management
Berli Jucker’s operations exhibit a clear focus on margin improvement and cost efficiency. Highlights include:
- Operating Profit Growth: Operating EBIT saw a 10.4% increase year-on-year in 4Q24, with improvements stemming from both higher top-line and better cost management.
- SG&A Efficiency: The SG&A expenses as a percentage of sales decreased from 20.2% in 4Q23 to 20.0% in 4Q24, driven by declining utility costs and improved top-line performance.
- Core Profit Margin: Although the core profit margin fell slightly, the overall picture remains positive thanks to significant quality improvements in earnings quality and cost discipline.
Detailed Analysis of Profit & Loss, Balance Sheet, and Cash Flow
Profit & Loss Statement
The Profit & Loss statement for the coming years reflects healthy trends in operating profit, pre-tax profit, and net profit:
- Revenue: Expected to grow consistently, reaching Bt194,268 million by 2027 from Bt170,814 million in 2024.
- Operating and EBITDA: EBITDA is projected to increase steadily, while operating profit also shows a positive trend from Bt12,977 million in 2024 to Bt14,235 million in 2027.
- Net Profit & Adjustments: Net profit, both reported and adjusted, improves with forecasts of Bt5,089 million in 2025, progressing further in subsequent years. The EPS trajectory and relative multiples indicate moderated valuation expansion reflective of anticipated improvements in efficiency.
Balance Sheet Overview
The balance sheet reveals a stable asset portfolio and prudent management of liabilities:
- Assets & Liabilities: Total assets are expected to increase modestly from Bt337,012 million in 2024 to Bt352,131 million in 2027. Fixed assets remain largely stable, and current assets improve gradually.
- Debt Management: Both short-term and long-term debts remain at similar levels over the forecast period, reflecting disciplined balance sheet management despite a slight increase in other long-term liabilities.
- Shareholders’ Equity: A steady growth in shareholders’ equity and an increase in minority interest underscore a strengthening balance sheet structure.
Cash Flow Dynamics
The cash flow analysis highlights the following aspects:
- Operating Cash Flow: Although the operating cash flow shows some fluctuation, it remains robust enough to sustain dividend payments and capital expenditure needs.
- Investing and Financing: Capital expenditure remains controlled with consistent levels of growth capex. Dividend payments and financing activities are well-managed to ensure healthy liquidity.
- Net Cash Change: Ending cash and cash equivalents are forecasted to show a modest but positive trend over the years, confirming effective cash management practices.
ESG, Governance, and Social Responsibility
Berli Jucker is committed not only to financial performance but also to sustainability, social responsibility, and strong governance:
- Environmental: The company has set an ambitious target to become a net zero company by 2050 and is aligning its business strategy with sustainable development frameworks.
- Social: Emphasizing respect for human rights, fair treatment of workers, and compliance with relevant laws, Berli Jucker integrates social responsibility into every aspect of its operations.
- Governance: Adhering to good corporate governance practices, the company has consistently received accolades – including an “Excellent” rating from the Thai Institute of Directors (IOD).
Quarterly Trends and Operational Highlights
A closer look at quarterly performance reveals key operational trends:
- SSSG Performance: While the same-store sales (SSS) growth for 1 January to 15 February 2025 is positive at 4% year-on-year, analysts note that differing Chinese New Year dates and one fewer operating day in February 2025 (compared to February 2024) impose a slight headwind, roughly equivalent to a -3% yoy effect.
- Improved Profitability Momentum: The Q4 2024 data show a significant improvement in profitability metrics. The elevation of the gross profit margin to 21%, along with heightened top-line results and improved cost efficiencies, underscores the company’s focus on returning to a growth path after a two-year dip in core earnings.
Valuation and Investment Recommendation
The comprehensive analysis underscores sustainable growth despite moderate earnings headwinds. The core profit for 2025 is forecast to grow organically by 9% year-on-year, driven by both top-line and margin enhancements. Reflecting these dynamics, the 2025 target price is calculated at Bt28.00, pegged at 21x 2025F PE – a valuation set at -1 standard deviation from the five-year mean (excluding the COVID-19 abnormal period). This relative valuation accounts for the company’s slower earnings growth compared to its grocery retailer peers.
Overall, UOB Kay Hian maintains a BUY recommendation on Berli Jucker Public Co Ltd, reflecting an attractive entry point for investors looking to benefit from its diversified operations, strong operational improvements, and steady cash flow as it works to enhance its profitability in the coming years.
Conclusion
Berli Jucker’s Q4 2024 results and its forward-looking projections signal a company in transition, moving from a two-year downturn in core earnings towards a period of organic profit growth in 2025. The combination of stable market positioning, effective cost management, margin expansion, and robust financial discipline makes Berli Jucker a compelling buy. With an ESG-focused and sustainable outlook, the company is well poised to navigate evolving market dynamics while delivering shareholder value over the long term.
For more detailed insights and personalized advice, investors are encouraged to review UOB Kay Hian’s comprehensive research reports and consult with their financial advisers.
