Company Coverage
Thai Union Group (TU TB) 2Q26: Earnings Beat Driven By Tariff Refund
Wednesday, 5 August 2026Thailand
Share
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt13.10
Bt13.30
+1.53%
Bt12.80
Analyst
Highlights
- TU’s 2Q26 core profit came in at Bt1,364m, (+8.4% yoy and 65.9% qoq), exceeding both our and the market forecasts, driven by a record-high gross profit margin following the tariff refund.
- 3Q26 earnings are expected to decline qoq due to higher raw material input costs.
- Maintain HOLD with a higher target price of Bt13.30.
Analysis
- Earnings beat. Thai Union Group (TU) reported a 2Q26 net profit of Bt1,264m (-0.7% yoy, but +13.5% qoq). Excluding one-off items, core profit came in at Bt1,364m, (+8.4% yoy and 65.9% qoq), exceeding both our and the market forecasts. However, this data includes the tariff refund benefit.
- Top-line recovered yoy and qoq. Top-line in 2Q26 was reported at Bt33.8b (+1.4% yoy and +5.6% qoq). We saw a yoy improvement in sales across most segments, while the qoq increase was due to seasonality. Ambient sales were reported at Bt16.8b (+1.5% yoy, and +11.3% qoq). Frozen seafood sales came in at Bt10b (-0.4% yoy, +6.1% qoq). Pet food sales were Bt4.5b (+2.3% yoy, but -12.2% qoq). Value-added sales were reported at Bt2.5b (+5.8% yoy, and +5.2% qoq).
- Gross profit margin rose yoy and qoq. Gross profit margin was reported at 21.4% (2Q25: 19.7%, 1Q26: 18.2%). The yoy increase was due to tariff refund, while the qoq improvement was driven by seasonality.
- Higher SG&A. SG&A-to-sales in 2Q26 came in at 15.0%, growing both yoy and qoq, and exceeding the company's guidance of 13.5-14.5%. The increase in SG&A expenses was mainly driven by higher freight costs, increased marketing investments, and tariff-related expenses.
TU announced a dividend payment of Bt0.40/share and ex-dividend date is on 14 Aug 26.
- The company revised its 2026 guidance: a) revised up sales growth guidance to 4-6% yoy (previously 3-4% yoy), b) revised up gross profit margin target to 19.5-20.5% (previously 19-20%), and c) revised down capex to Bt5.0b-5.5b (previously Bt5.0b-6.0b).
- Update on tuna price trend. Tuna prices are expected to average US$1,900/tonne in 3Q26 (+7.5% qoq, +22.6% yoy), before falling to US$1,800/tonne in 4Q26. Management expects prices to normalise further to around US$1,700/tonne in 2027. In terms of Super El Nino, it could support improved catch volumes in 4Q26, which should help to soften tuna prices.
- New US tariff update. Thailand is subject to a 12.5% tariff, effective 24 Jul 26, slightly above peers at 10%. The company believes the tariff differential remains manageable.
- 3Q26 earnings momentum. TU foresees qoq sales growth across most business segments, with the ambient business entering its seasonal peak. Despite stronger sales, we forecast TU's gross profit margin declining qoq in 3Q26 to around 20%. Margin pressure is expected to come from higher raw material costs, particularly rising tuna costs, as the benefit from low-cost tuna inventory gradually diminishes. We project that 3Q26 core earnings will drop qoq, with 2Q26 likely representing the quarterly earnings peak of the year due to softer margins in 2H26. We continue to prefer ITC, given its stronger sales growth outlook, exposure to premiumisation and pet humanisation trends, and superior pricing power.
Company Coverage
Thai Union Group (TU TB) 2Q26: Earnings Beat Driven By Tariff Refund
Wednesday, 5 August 2026Thailand
Share
Highlights
- TU’s 2Q26 core profit came in at Bt1,364m, (+8.4% yoy and 65.9% qoq), exceeding both our and the market forecasts, driven by a record-high gross profit margin following the tariff refund.
- 3Q26 earnings are expected to decline qoq due to higher raw material input costs.
- Maintain HOLD with a higher target price of Bt13.30.
Analysis
- Earnings beat. Thai Union Group (TU) reported a 2Q26 net profit of Bt1,264m (-0.7% yoy, but +13.5% qoq). Excluding one-off items, core profit came in at Bt1,364m, (+8.4% yoy and 65.9% qoq), exceeding both our and the market forecasts. However, this data includes the tariff refund benefit.
- Top-line recovered yoy and qoq. Top-line in 2Q26 was reported at Bt33.8b (+1.4% yoy and +5.6% qoq). We saw a yoy improvement in sales across most segments, while the qoq increase was due to seasonality. Ambient sales were reported at Bt16.8b (+1.5% yoy, and +11.3% qoq). Frozen seafood sales came in at Bt10b (-0.4% yoy, +6.1% qoq). Pet food sales were Bt4.5b (+2.3% yoy, but -12.2% qoq). Value-added sales were reported at Bt2.5b (+5.8% yoy, and +5.2% qoq).
- Gross profit margin rose yoy and qoq. Gross profit margin was reported at 21.4% (2Q25: 19.7%, 1Q26: 18.2%). The yoy increase was due to tariff refund, while the qoq improvement was driven by seasonality.
- Higher SG&A. SG&A-to-sales in 2Q26 came in at 15.0%, growing both yoy and qoq, and exceeding the company's guidance of 13.5-14.5%. The increase in SG&A expenses was mainly driven by higher freight costs, increased marketing investments, and tariff-related expenses.
TU announced a dividend payment of Bt0.40/share and ex-dividend date is on 14 Aug 26.
- The company revised its 2026 guidance: a) revised up sales growth guidance to 4-6% yoy (previously 3-4% yoy), b) revised up gross profit margin target to 19.5-20.5% (previously 19-20%), and c) revised down capex to Bt5.0b-5.5b (previously Bt5.0b-6.0b).
- Update on tuna price trend. Tuna prices are expected to average US$1,900/tonne in 3Q26 (+7.5% qoq, +22.6% yoy), before falling to US$1,800/tonne in 4Q26. Management expects prices to normalise further to around US$1,700/tonne in 2027. In terms of Super El Nino, it could support improved catch volumes in 4Q26, which should help to soften tuna prices.
- New US tariff update. Thailand is subject to a 12.5% tariff, effective 24 Jul 26, slightly above peers at 10%. The company believes the tariff differential remains manageable.
- 3Q26 earnings momentum. TU foresees qoq sales growth across most business segments, with the ambient business entering its seasonal peak. Despite stronger sales, we forecast TU's gross profit margin declining qoq in 3Q26 to around 20%. Margin pressure is expected to come from higher raw material costs, particularly rising tuna costs, as the benefit from low-cost tuna inventory gradually diminishes. We project that 3Q26 core earnings will drop qoq, with 2Q26 likely representing the quarterly earnings peak of the year due to softer margins in 2H26. We continue to prefer ITC, given its stronger sales growth outlook, exposure to premiumisation and pet humanisation trends, and superior pricing power.
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt13.10
Bt13.30
+1.53%
Bt12.80
Analyst
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