BANGKOK, Oct 8, 2015 - (ACN Newswire) - Thai Foods Group (SET: TFG), a leading player in the integrated food business with operations in both Thailand and Vietnam whose equity shares become publicly tradable on 8 October, and are expected to be popular among investors due to the handsome discounts given to IPO subscribers, declared its decisions to expand its fresh poultry meat export markets to include the EU and Japan, and achieve added value and maintain a decent gross profit margin rate by entering the processed food industry. The Company's management is confident there will be a performance turnaround in 2016, following an expansion of processed food production plant and enhancement of the poultry, swine and animal feed production capacity, and as poultry and swine prices are rising.
Mr Winai Teawsomboonkit, Chief Executive Officer of TFG, revealed that TFG's 1.1 billion shares of stock (par value at THB 1 each) have become tradable on the Stock Exchange of Thailand (SET) on 8 October 2015, with ticker symbol "TFG", following the highly successful initial public offering (IPO) between 29 September and 2 October 2015 at the subscription price of THB 1.95 each, which represented a 40% discount from the fair price of THB 3.30 as estimated by analysts.
TFG's four main business segments include i) poultry business, which involves hatcheries, production and sale of poultry meat, chicks, broilers and poultry meat processed products; ii) swine business, which includes breeding and sale of live animals; iii) feed mill business, with a focus on feed for poultry and swine production; and iv) other business, which includes operation of a research centre for development and manufacturing of vaccines and medical supplies and manufacture and distribution of animal feed containers and plastic agricultural equipment.
The CEO added that, after the SET listing, TFG will put forward its plan to expand the export markets for its fresh poultry meat products to include the European Union (EU) and Japan, as a way to increase the percentage of export revenue. It will also work to create added value and add product variety by processing raw materials to make ready-to-eat food, before marketing them with the brand "Thai Aroi". It has started marketing sausages and will begin commercialising a number of other products in due course. These are expected to allow it to maintain a growth level that is better than the industrial average and at least retain the current gross profit margin level at 15%.
The funds raised from the IPO will be used to strengthen TFG's businesses, building and upgrading chicken sausage, poultry and swine parts and feed production plants and expanding the poultry and swine parent-stock farms to enhance production capacity and secure an adequate supply of materials for the implementation of future plans. Any balance will be used to repay loans to reduce finance costs and lower the debt-to-equity (D/E) ratio from 3.3 to 1.5-1.6, thereby improving the company's fundamentals and enabling the company to pay dividends to the shareholders.
"We are confident that our strategic move to focus our attention on exports, processed food products and other downstream businesses, which promise better profit margins compared to the industrial average, will enhance our capacity and competitiveness. We believe that we will see a performance turnaround in 2016 and eliminate the deficits caused by this year's oversupply in the poultry segment," the CEO said.
Mr Kraithip Krairiksh, Chairman of KT Zmico Securities, the Financial Advisor and Lead Underwriter, noted that the fact that the domestic poultry and swine meat prices, which have bottomed out in the first quarter of 2015, are now on the rise and the weakening Baht will boost TFG's competitiveness in the export sector, particularly in connection with the export of fresh poultry meat to the EU and Japan. Meanwhile, he said, the company will likely experience a performance recovery as it is seeking to add value to its materials by looking to processed food products, which offer the opportunity to secure good profit margins.
Released for TFG by MasterMind Communications:
Orn-arong ("Fah") PattaravejkulTel: +66 2612 2081 #129 Mobile: +66 8 6884 4458 E-mail: orn_tabo@hotmail.com
Source: Thai Foods Group PCL
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