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Company Visit Note Summary - Premier Marketing PLC (PM)

Core Content

Premier Marketing PLC (PM) is a Thai company established in 1977 and listed on the SET in May 2008. It is a manufacturer and distributor of fish-based snacks, confectionery, personal care items, and other consumer goods. PM operates under the brand "Taro" and also distributes products from other listed companies such as TUF, KASET, and JCT. The company has a diverse product portfolio, handling about 500 SKUs across 100 brands and operating through 30,000 outlets nationwide. It also has production and cold storage facilities that are partially utilized.

Main Points

Business Overview

• Core Products: Taro (fish-based snacks), Coryfin-C (vitamin C candy), and other confectionery and personal care items.
• Distributors: PM distributes products from TUF, KASET, and JCT, including items like Prantalay, instant porridge, and hair coloring.
• Facilities: PM has production and cold storage facilities that are still underutilized, providing flexibility for expansion.

Market Position

• Taro Brand: Holds about 75% market share in the fish snack segment, making it the leading brand in Thailand.
• Distribution Network: Utilizes 427 vehicles to reach 200,000 points of sales, including modern trade outlets.

Financial Performance

• Sales Growth: In 2012, sales grew by 16.6% YoY, partly due to increased demand for dry foods during the flood. In 1H13, sales grew by 9% YoY, slightly below the internal target due to soft performance in 2Q13.
• ROE: Maintained a strong ROE of 33.7% in 2012 and 30.6% over the past 10 quarters, indicating efficient use of assets.
• Profit Margins: PM has a healthy gross margin of 27.5%, EBITDA margin of 11.9%, and a net profit margin of 9.7%, which is significantly better than its peers.
• Share Buybacks: PM has conducted share buybacks, with 51.57 million shares repurchased during the program from Sept10-Mar11, which can be resold up to three years after the program ends.

Strategic Initiatives

• Product Expansion: PM continues to expand its product portfolio to increase asset utilization, particularly in its production and cold storage facilities.
• ASEAN Expansion: The company is actively seeking to grow in the ASEAN region and is looking for a distribution partner for its Taro product line.
• Efficiency: Despite not being a large distributor, PM is highly efficient, with a high asset turnover of 2x, and its return profile is closer to that of a manufacturer.

Key Information

Stock Information

• Share Price: THB7.90
• Target Price: THB12.9 (Consensus)
• Shares Issued (m): 598.2
• Market Cap (US$ m): 160.2
• 3-mth Avg Daily Turnover (US$ m): 0.43
• SET Index: 1401.08
• Free float (%): 26.73

Major Shareholders

• Premier Fission Capital: 49.8%
• Premier Marketing: 8.65%
• Singwangcha Family: 4.53%

Financial Highlights (2012A)

• ROE (%): 33.7
• Net Debt/(cash): -38
• NTA/shr (Bt): 2.24
• Interest cover (x): 81

Performance Metrics

• 52-week High/Low: THB13.0/THB5.4
• 1-mth Growth (%): -19.4
• 3-mth Growth (%): -23.3
• 6-mth Growth (%): -15.1
• 1-yr Growth (%): 42.3
• YTD Growth (%): 7.5

Earnings Table (Bloomberg Consensus)

Financial Ratios (2012)

Conclusion

Premier Marketing PLC (PM) is a successful and efficient manufacturer and distributor with a strong market position in the fish snack segment and a diverse portfolio of consumer goods. Its financial performance is robust, with high ROE and profit margins, and it has a clear strategy for expanding its product range and entering new markets such as ASEAN. Despite being a smaller player compared to larger distributors like Berli Jucker (BJC), PM's operational efficiency and strong return profile make it an attractive investment opportunity.