Bualuang sees TVO profit recovery, strong dividends support valuation

thunhoon.com··THUSBR·Read original
2▲5 ▼0Impact / 5
Summary · why it matters

Bualuang Securities stated that Thai Vegetable Oil Public Company Limited, or TVO, reported Q2/2026 net profit of 877 million baht, up 35% year-on-year and 24% quarter-on-quarter, with revenue of 8.28 billion baht, up 24% year-on-year and 7% quarter-on-quarter, supported by higher sales volume after capacity expansion since late 2025. Sales of soybean meal and soybean oil increased more than 20% year-on-year, despite lower average selling prices. Gross margin recovered to 13.7% from 10.8% in Q1/2026, but still below 16.1% in Q2/2025. For Q3/2026, the outlook remains positive due to slightly higher selling prices for soybean meal and soybean oil, while soybean costs are expected to remain stable, supporting margins. On the supply side, global soybean supply for 2026/27 remains high, with the USDA raising its US production forecast to 4.52 billion bushels and ending stocks to 320 million bushels. Brazil is a key variable due to El Niño uncertainty, while demand from China continues to support prices, with US new-crop soybean outstanding sales at 8.3 million tons, of which about 3.1 million tons are to China. The soybean oil business is also supported by high vegetable oil prices, with palm oil up 17% YTD and soybean oil up 40% YTD as of mid-August. In 1H2026, soybean oil accounted for 33% of revenue and soybean meal 53%, while 88% of sales came from the domestic market. The research house views that short-term profit trends remain good, but consensus expects 2027 profit to decline 13% year-on-year, making TVO's key highlight its dividends, with consensus expecting a dividend yield of around 7% per year, while the stock trades at a 2027 PER of around 10.3 times.

Impact on assets 5

Consumer Staples▲
Others▲