LIB HIGHLIGHT : SNNP “ปีนี้แย่ ปีหน้าฟื้น…”

Summary

The company faced significant challenges in 2023, particularly in Vietnam, where distribution issues impacted sales. However, adjustments are underway, and there’s optimism for a recovery in 2024, with expected growth of around 3%. The company is addressing operational inefficiencies and expanding its product portfolio, which should lead to better performance, especially in international markets like Vietnam and the Philippines. While the outlook is cautious, growth is projected at 5-9%, with a focus on improving distribution channels. The company’s valuation has become more attractive for long-term investors, signaling potential future growth as operational challenges subside.

Takeaways

• 😀 2023 has been a challenging year, especially in Vietnam, due to issues with distributors and product distribution.
• 😀 The company's sales are expected to decline by 2% this year, with a projected revenue of 5,800 million baht.
• 😀 The domestic market in Thailand is expected to grow by about 5%, while international markets, particularly Vietnam, are struggling.
• 😀 The company aims for a 7% growth in 2024, with targeted sales of 6,300 million baht.
• 😀 Recovery in Vietnam is anticipated by Q4 2024, after addressing distribution challenges in the market.
• 😀 In 2024, the focus will be on improving distribution strategies in Vietnam and increasing the number of distributors in the Philippines.
• 😀 Profit margins in 2024 are expected to remain close to the levels of 2023, even though the growth might be modest.
• 😀 The company plans to introduce new products regularly to diversify its portfolio and expand market presence.
• 😀 The company's PE ratio for 2025 is expected to be around 16-17x, making it an attractive investment opportunity for long-term growth.
• 😀 The target price for the company's stock in 2025 is set at 14.70 baht, with expectations of gradual growth post-recovery.
• 😀 Despite economic difficulties, including the real estate crisis in Vietnam, the company is focusing on better product distribution and diversification in international markets.

Q & A

What were the main challenges faced by the company in 2023?

The company faced significant challenges in 2023, particularly in its operations in Vietnam. Issues with distribution and product offerings led to disappointing sales results. The company had to adjust its growth expectations and revise its sales targets.

What is the company’s growth outlook for 2024?

The company expects modest growth of about 3% year-on-year in 2024. Initially, the company had set a target of 10-15% growth, but due to the difficulties faced in 2023, the outlook was revised to a more conservative 5-9% growth.

What measures are being taken to resolve the issues in Vietnam?

The company is addressing distribution problems in Vietnam, and they expect these issues to be resolved by the fourth quarter of 2024. Once the situation stabilizes, the company anticipates a recovery starting in the first quarter of 2025.

How is the company’s domestic performance in Thailand expected to evolve?

Despite the challenges abroad, the company’s domestic performance in Thailand is expected to remain stable, with a growth forecast of around 5% for 2024.

What strategy is the company implementing to improve its operations in Southeast Asia?

The company is expanding its product distribution channels in countries like Vietnam and the Philippines to ensure a more diversified and complete product offering. This will help increase market reach and sales in these regions.

What role does the Philippine market play in the company’s strategy?

In the Philippines, the company is working to add more distributors to ensure a fuller range of products is available, enhancing the market presence and addressing local demand more effectively.

How is the company’s financial performance expected to change in 2024?

Although the company’s sales are expected to grow more modestly, they anticipate a recovery from the difficulties faced in 2023. A modest net profit growth of around 706 million baht is expected, with a stable gross margin.

What impact did the real estate situation in Vietnam have on the company’s performance?

The real estate situation in Vietnam initially impacted consumer spending and confidence, affecting overall market conditions. However, the primary challenge for the company was related to distribution management rather than direct consumer purchasing power.

What is the company’s valuation like, and why is it considered attractive?

Currently, the company is trading at a Price-to-Earnings (PE) ratio of about 16, down from over 30 in previous years. This lower PE ratio makes the stock more attractive to potential investors, as it suggests the company is undervalued compared to past trading levels.

What are the future prospects for the company’s stock in 2024?

Given the company's plans to address its challenges, especially in Vietnam, and the expected stabilization in 2024, the stock is seen as a good investment opportunity for those looking to invest in a potential recovery. The company’s price target for 2024 is set at 14.70 baht, reflecting a PE of around 20 times.