Shares of i-Tail Corporation Public Company Limited, or ITC, stood at 17.50 baht, up 1.00 baht or 6.06%, on trading value of 169.30 million baht, after Kiatnakin Phatra Securities Public Company Limited, or KKPS, raised its recommendation on ITC to Buy from Underperform and lifted its target price to 18.70 baht from 14.70 baht, saying the previous pressures are beginning to ease, including the profit outlook, gross margin and dividend payments. The research team said the earlier concerns centered on two issues: the outlook for gross margin and profit from premium product lines, and a dividend payout ratio that could come in below expectations. Both factors are now showing improvement. For its second-quarter 2569 results, ITC posted an adjusted gross margin of 24.0%, above the expected 23.2%, while pet food exports to the United States grew faster than expected on higher average selling prices, particularly in the cat food segment. KKPS therefore raised its gross margin forecasts for ITC in 2569 to 2571 by an average of 0.6 percentage points and lifted its normal profit forecasts for the same period by 5.8%. On dividends, KKPS had previously expected ITC to pay out about 70%, but ITC paid a dividend for the first six months of 2569 of 0.55 baht per share, a payout ratio of about 95%. The research team thus raised its dividend payout forecasts for ITC in 2569 to 2571 to an average of 85% from 70%. ITC shares trade at a 2569 P/E of about 15 times, below the average of 29.4 times for OEM pet food producers in China. Return on equity for 2569 is expected at 13.8%, above the group average of 8.6%, while return on assets for 2569 is expected at 12.2%, above the group average of 5.4%. Earnings per share for ITC in 2569 are expected to grow 12%.
i-Tail Corp. PCLKKPS upgraded ITC to Buy and raised its target price to 18.70 baht, citing easing gross-margin, profit and dividend concerns.
