Company Coverage
Berli Jucker (BJC TB): More Bullish On Growth Outlook With Attractive Valuation
BUY (Maintained)
Current price:
Target price:
Upside:
Bt15.80
Bt18.00
+13.92%
Analyst
Highlights
- The tone during its analyst meeting was positive. Management is confident in packaging sales momentum during 2H26, underpinned by very strong demand.
- Modern retail is gaining momentum as Big C’s qtd SSSG has improved to flat yoy, while MMVN’s July SSSG was 11-12% yoy.
- Maintain BUY with a target price of Bt18.00.
Analysis
- We came away from the analyst meeting with a more positive view on BJC.
- Management remains confident in packaging sales momentum during 2H26, underpinned by healthy demand from both beverage and alcohol customers. Growth should come from both domestic and third-party customers. We see limited downside risk to margins as soda ash costs are largely locked in, while natural gas prices have already peaked and are now declining. Selling prices also remain stable. Although there are early signs that some industry players may consider restarting furnaces, we expect this to take time given the significant costs involved.
- Modern retail is gaining momentum. Big C’s qtd SSSG improved to flat yoy, from low single-digit declines in July, with SSSG turning strongly positive in the first half of August. The recovery was driven by assortment optimisation, higher direct sourcing, stronger e-commerce sales, and robust growth in Donjai stores. The Big Format renovation programme has also generated a positive sales uplift. Around 44% of stores have been renovated over the past three years, with the remaining stores to be gradually renovated. The new Mini Big C format has received a positive response, with management targeting 120 new-format stores (300 sqm each) and 30 smaller-format stores by end-27. Meanwhile, MM Vietnam (MMVN) continued to deliver strong momentum, with July SSSG at 11–12% yoy. However, SG&A is also expected to remain high mainly due to higher staff costs following store closures and employee relocations, with improvement expected in 4Q26.
- SG&A may remain high. The key challenges are softer gross margins in the consumer business and elevated SG&A. Demand remains healthy, supported by new product launches that have helped BJC gain market share, although higher packaging costs remain a headwind. We expect the consumer business earnings to continue slowing.
Highlights
- The tone during its analyst meeting was positive. Management is confident in packaging sales momentum during 2H26, underpinned by very strong demand.
- Modern retail is gaining momentum as Big C’s qtd SSSG has improved to flat yoy, while MMVN’s July SSSG was 11-12% yoy.
- Maintain BUY with a target price of Bt18.00.
Analysis
- We came away from the analyst meeting with a more positive view on BJC.
- Management remains confident in packaging sales momentum during 2H26, underpinned by healthy demand from both beverage and alcohol customers. Growth should come from both domestic and third-party customers. We see limited downside risk to margins as soda ash costs are largely locked in, while natural gas prices have already peaked and are now declining. Selling prices also remain stable. Although there are early signs that some industry players may consider restarting furnaces, we expect this to take time given the significant costs involved.
- Modern retail is gaining momentum. Big C’s qtd SSSG improved to flat yoy, from low single-digit declines in July, with SSSG turning strongly positive in the first half of August. The recovery was driven by assortment optimisation, higher direct sourcing, stronger e-commerce sales, and robust growth in Donjai stores. The Big Format renovation programme has also generated a positive sales uplift. Around 44% of stores have been renovated over the past three years, with the remaining stores to be gradually renovated. The new Mini Big C format has received a positive response, with management targeting 120 new-format stores (300 sqm each) and 30 smaller-format stores by end-27. Meanwhile, MM Vietnam (MMVN) continued to deliver strong momentum, with July SSSG at 11–12% yoy. However, SG&A is also expected to remain high mainly due to higher staff costs following store closures and employee relocations, with improvement expected in 4Q26.
- SG&A may remain high. The key challenges are softer gross margins in the consumer business and elevated SG&A. Demand remains healthy, supported by new product launches that have helped BJC gain market share, although higher packaging costs remain a headwind. We expect the consumer business earnings to continue slowing.
BUY (Maintained)
Current price:
Target price:
Upside:
Bt15.80
Bt18.00
+13.92%
Analyst
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