Overview of Berli Jucker Public Co Ltd (BJC)

Berli Jucker Public Co Ltd (BJC) is a diversified conglomerate operating in four key supply chains: packaging, consumer, healthcare and technical, and modern retail. The company has a prominent presence in Thailand and is backed by major shareholders including TCC Corporation (45.68%), TCC Holding (29.32%), and RAFFLES NOMINEES (PTE) LIMITED (3.92%).

With a current share price of Bt22.50 and a target price of Bt28.00, BJC offers an upside potential of 24.4%. The company is part of the Consumer Staples sector, with a market capitalization of Bt90,175.4 million (US\$2,670.6 million).

4Q24 Earnings Momentum and Performance Overview

BJC is expected to report 4Q24 earnings of Bt1.7 billion, reflecting a year-on-year (yoy) increase of 3.3%. This growth is underpinned by improvements in top-line performance and profitability, albeit partially offset by a higher effective tax rate of 23% compared to 2% in 4Q23. Pre-tax profit is forecasted to grow significantly by 31% yoy, driven by a robust 4% yoy and 7.6% quarter-on-quarter (qoq) increase in sales and services revenue, reaching Bt41,443 million in 4Q24.

The healthcare, technical supply chain, modern trade, and packaging businesses were the key drivers of sales growth, although the consumer supply chain business experienced a slight decline. Same-store-sales growth (SSSG) for the modern trade business is projected at 2% yoy.

Profitability Gains and Margin Improvements

BJC’s gross profit margin for 4Q24 is expected to reach 21%, a notable improvement from 20.2% in 4Q23. This increase is attributed to better margins in the consumer, healthcare, and modern trade segments. Additionally, the selling, general, and administrative (SG&A) expenses as a percentage of sales are projected to decrease to 20% in 4Q24, down from 20.8% in 3Q24 and 20.2% in 4Q23, driven by lower utility costs and stronger top-line performance.

Net profit for 4Q24 is anticipated to rise by 141% qoq to Bt1,692 million, benefiting from seasonal effects and improved operational efficiency.

Key Financial Metrics and Forecasts

BJC’s financial performance is projected to remain robust over the coming years:

• Net Turnover: Expected to grow from Bt167,902 million in 2023 to Bt186,797 million by 2026.
• EBITDA: Forecasted to increase from Bt20,608 million in 2023 to Bt23,553 million in 2026.
• Net Profit: Adjusted net profit is expected to recover from Bt4,880 million in 2023 to Bt5,429 million in 2026.
• EPS: Estimated to rise from Bt1.2 in 2024 to Bt1.4 in 2026.
• Dividend Yield: Predicted to improve from 2.8% in 2024 to 3.9% in 2026.

BJC’s financial leverage remains stable, with net debt-to-equity forecasted to decline slightly from 135.7% in 2023 to 129.2% in 2026.

2025 Outlook and Valuation

Heading into 2025, BJC is poised to benefit from positive SSSG momentum, with a 3% yoy increase observed in the first 15 days of January. This uptick is partly driven by consumer spending delays due to the tax deduction policy from 16 January to 28 February 2025. The company maintains its 2025 core profit growth forecast at 9% yoy, supported by top-line growth and gross margin improvement.

BJC’s target price for 2025 is set at Bt28.00, pegged to a 21x 2025F PE, which aligns with -1 standard deviation from its five-year mean (excluding the COVID-19 period).

Environmental, Social, and Governance (ESG) Initiatives

Environmental

BJC has committed to achieving net zero emissions by 2050, aligning its operations with global sustainable development goals.

Social

The company emphasizes social responsibility, ensuring fair treatment of workers, respect for human rights, and compliance with relevant laws.

Governance

BJC adheres to robust corporate governance practices and has received an “Excellent” rating from the Thai Institute of Directors.

Share Price Catalysts

Potential catalysts for BJC’s stock performance include better-than-expected recovery in SSSG and gross margin improvements. Additionally, progress in ESG initiatives and sustainability goals may enhance investor confidence.

Conclusion

Berli Jucker continues to demonstrate gradual improvements in earnings momentum and profitability. With a clear focus on operational efficiency, sustainable growth, and ESG commitment, BJC’s long-term outlook remains positive. The “BUY” recommendation, coupled with a target price of Bt28.00, underscores its potential for value creation in 2025 and beyond.