Carabao shares up more than 5% on strong Q2 performance


The price of Carabao Group (CBG) shares rose more than 5 per cent in morning trading today (August 10) as the energy drink company's second-quarter profit increased by 20.1 per cent year on year, driven by a 27 per cent rise in foreign income.

CBG's share price hit a high of Bt134.50 in the morning session, up 6.76 per cent from the previous close, before falling to Bt131.

CBG's shares gained positive sentiment from a strong second-quarter performance that generated revenue of Bt4.508 billion, up 20.1 per cent year on year. Income from the company's products rose by 13.6 per cent year on year.

On the domestic front, CBG's income dropped slightly by 1.7 per cent as sales in the energy drink market fell 13.4 per cent.

However, CBG's foreign sales rose by 27 per cent to Bt2.219 billion, 81 per cent or Bt1.8 billion of which came from Cambodia, Laos, Myanmar and Vietnam (CLMV) and 7 per cent from China. Increasing sales in CLMV countries, especially Myanmar, boosted the company's profit to Bt890 million, up 69.7 per cent year on year.

A stock analyst at Yuanta Securities expected CBG's net profit to hit a new high in the remaining quarters of this year as the income from sales of its C+Lock drink and exports to CLMV countries were not included in the company's forecast.

"In this year’s fourth quarter, production at CBG's bottling plants will increase by 40 per cent to 4.2 million bottles per day, while production at its canning plants will increase by 30 per cent to 5.7 million cans per day. This will enable the company to boost income from foreign countries," the analyst said. "Meanwhile, CBG's paper packaging costs will fall due to the company's new packaging factory."

The analyst added that his securities company has increased CBG’s stock target price to Bt130-Bt140 per share, advising investors to buy this stock as the upside gain was around 3 to 10 per cent.

We expect the company's stocks to gain positive sentiment from its positive performance," the analyst added. "Investors will sell stocks to take profit when the price moves to around Bt135 per share," he forecast.