Exotic Food Public Company Limited

Krungsri Securities assesses that Exotic Food Public Company Limited, or XO, is returning to a recovery cycle after customers in overseas markets began restocking products again. It expects normal profit in the third quarter to come in at 191 million baht, up 44% from a year earlier and 13% from the previous quarter, the highest level in nine quarters. Net profit is expected at 186 million baht, up 41% from a year earlier and 70% from the previous quarter, after deducting special expenses of about 5 million baht from the destruction of chilies. Revenue is expected at 653 million baht, up 28% from a year earlier and 12% from the previous quarter, supported by orders from customers in Europe, the main market that generates about 83% of the company's revenue. The gross profit margin is expected at 49.5%, up from 46.4% in the third quarter of last year and 49.3% in the second quarter of this year. Krungsri estimates full-year normal profit at 650 million baht, growing 26%, and is starting to see an opportunity to raise its profit forecast by about 6% on better-than-expected revenue and gross margin. It maintains a Buy recommendation with a target price of 21.80 baht for next year, based on a price-to-earnings ratio of 13 times. Meanwhile, the company plans to expand its distribution channels in Europe from about 5,000 to 6,000 branches to 8,000 branches, and to invest in a new factory worth about 1.3 billion baht, expected to be completed in the third quarter of 2028, which will increase its revenue capacity by about 28%, from 3.3 billion baht to 4.3 billion baht per year.

XO reported second-quarter 2026 results, with early signs of a sales recovery. Sales revenue came in at 583 million baht, down 4.8% year-on-year but up 12.7% quarter-on-quarter. Sales volume was 5,892 tonnes, up 5.8% quarter-on-quarter but down 5.5% year-on-year. The change in sales was driven mainly by the European market, which remains the key market, accounting for about 82.9% of sales. Net profit was 109.8 million baht, down 35.4% year-on-year, hit by a 59.7 million baht inventory write-down loss. That pushed gross profit margin down to 39.1%, but excluding that item, normal gross profit margin would be 49.3%, up from 46.8% in the second quarter of 2025. The impact from the chili stock has largely been recognised in the first half of 2026, and in the third quarter of 2026 only stock destruction costs of no more than 10 million baht are expected to remain. For the second-half 2026 outlook, momentum is expected to accelerate, with the third quarter of 2026 continuing to grow from the second quarter, and profit is seen growing faster than sales. Management confirmed that the second half of 2026 will be better than the first half and maintained its target of around 10% year-on-year revenue growth for 2026, after the first half of 2026 grew only 0.76% year-on-year. On long-term investment, the company is still investing in a new plant at Rojana, Laem Chabang, worth about 1.30 billion baht, targeting an increase in production capacity from 34,571 tonnes per year to no less than 43,905 tonnes per year in 2028.

Jittiporn Chantarat, Chief Executive Officer of Exotic Food Public Company Limited, or XO, disclosed that operating results in the second half of 2026 will accelerate clearly, with third-quarter 2026 sales expected to grow about 12-15%, while the fourth quarter of 2026 also remains on a good trend thanks to forward orders of about five weeks. This gives the company confidence that full-year 2026 sales will grow 10% as planned, despite expenses of about 70-80 million baht for destroying chilies. The main driver comes from the European market, where customer inventories have declined and sales have clearly recovered, while the US market has remaining sales of less than 10 million baht, down from more than 500 million baht in 2023 and less than 100 million baht in 2024, meaning US import tariff measures have no significant impact. As for the investment plan for a new factory, it will use about 1.3 billion baht, with roughly 70% borrowed from financial institutions and the rest from cash flow. It is expected to be completed in the second quarter of 2028 and to begin exports from the third quarter of 2028. The new factory will replace the old plant and support sales of about 4.2 billion baht when operating two shifts, with potential to rise to about 8 billion baht. For 2027, the company plans a marketing budget of about 5% of sales, expects sales to continue growing 5-10%, and aims to raise its gross profit margin to about 45% from 40%.

Globlex Securities Company Limited, or GBS, has upgraded its recommendation on Exotic Food Public Company Limited, or XO, from "Hold" to "Speculative Buy" and raised its fair value from 15.60 baht to 19.20 baht, based on a prospective P/E ratio of 16.2x, up from 11.4x, and forecast earnings per share for 2026 of about 1.26 baht per share. Wilasinee Boonmasoongson, Assistant Managing Director at GBS, said XO reported second-quarter 2026 profit of 110 million baht, contracting 35% year-on-year and 15% quarter-on-quarter, on revenue of 589 million baht, down 4% year-on-year but up 13% quarter-on-quarter. Customers in Europe accounted for about 83% of core revenue, and the company has gained a new distributor in France. Gross margin fell from 45.4% in the first quarter of 2026 to 39.1%, due to a 60 million baht write-off of pickled chili raw materials; excluding that item, margin would be around 48-49%. The research team expects second-half 2026 revenue to grow at least 10% on accelerating European orders and the French distributor, and estimates margin will hold steady in a range of 47-49%. It has raised its 2026 revenue forecast from 2.26 billion baht to 2.37 billion baht, a rise of 10% year-on-year. Meanwhile, a new factory with an investment value of 1.3 billion baht is expected to begin construction in the third quarter of 2026, with an estimated 900-1,000 million baht in borrowing.

Exotic Food Public Company Limited, or XO, is signalling a second-half recovery from Europe, its main market, with full-year 2026 revenue expected to grow about 10% from the previous year and third-quarter growth continuing clearly from the second quarter. Chief Executive Officer Jittiporn Jantarach said Europe accounted for about 83% of sales revenue in the second quarter of 2026, and the company aims to expand its distribution points in Germany from around 5,000 branches to 8,000 branches. It is also allocating 1.29948 billion baht to build a new factory in Rojana Industrial Park, Laem Chabang, Chonburi province, to support overseas demand, with the investment structure planned at about 70% from loans and about 30% from cash. Second-quarter 2026 results showed sales revenue of 582.76 million baht, up 12.74% from the previous quarter, and net profit of 109.77 million baht, down 35.44% from the same period last year. For the first six months, revenue was 1.09966 billion baht, up 0.76%, while net profit was 238.48 million baht, down 15.79%, including total inventory write-down losses of 74.55 million baht. The board approved an interim dividend of 0.378 baht per share, with the stock trading ex-dividend on 24 August 2026, a record date of 25 August 2026, and dividend payment on 9 September 2026.