Berli Jucker Public Co Ltd: Recovery takes time
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- Big C’s QTD SSSG improved vs 3Q25 but still soft amid cautious spending from fluid economic situation
- 4Q25F core profit expected to decline y/y on softer revenue and reduced scale benefits
- Flooding impact limited to date, though border area conflicts pose incremental risks
- Maintain HOLD with lower TP of THB17.00, reflecting a more conservative mid to long term growth outlook
4Q25F performance remained soft
QTD Big C’s SSSG trend picked up but recovery remains sluggish. Based on discussions with management, we believe the monthly SSSG trend has improved with a narrower y/y contraction compared to -3.8% in 3Q25. However, overall SSSG still sits in negative territory of 3-3.5%. Among key categories, only fresh food category remained the most resilient.
Despite government stimulus efforts and stronger tourist inflows in 4Q25, the pace of SSSG recovery remains constrained due to cautious consumer spending and recent negative events including flooding in Southern part and Northen part of Thailand.
As a result, we expect modern trade sales to decline y/y in 4Q25 while we also expect gross margin to soften given intensifying competition.
Performance in other segments likely to remain mixed. Similar to 3Q25, we estimate the packaging and healthcare & technical sales to decline y/y in 4Q25 on lower glass costs (for packaging segment) and the divestment of Thai Scandic Co., (for healthcare & technical segment). However, we expect both segments to deliver stronger gross margins y/y.
Consumer sales should be able to grow y/y driven by both food and non-food sales. However, consumer gross margin should be narrower due to a high base in 4Q24.
4Q25F core profit to be weaker y/y. We forecast 4Q25F core profit to come in at THB1.37bn (-10% y/y, +117% q/q). The spike in q/q earnings is mainly on seasonality and lower finance costs as the company had recorded higher refinancing costs in 3Q25. On a y/y basis, the earnings would be dragged by lower sales and lower rental income which also impacts operating margin from less scale benefits.
Outlook
Flood related disruptions are easing, but new risks from Thailand – Cambodia conflicts are emerging. BJC has already fully reopened its three Big C (hypermarkets) that closed during the flooding in Hat Yai. The company is also reopening 35 Big C Mini stores that were temporarily shut during the same period. In total, the contribution from these closed stores is small, accounting for c.1%-2% of Big C sales.
On the other hand, the intensifying conflict along the Thailand- Cambodia border presents new downside risks for Big C’s performance in 4Q25. As at end 3Q25, the company operated one Big C hypermarket (from 155 Big C hypermarket) and 20 Big C Mini stores in Cambodia (from 1,492 stores). Except for the hypermarket, the small format stores are operating, nevertheless they have been negatively impacted by weaker tourist spending due to the escalating tensions between Thailand and Cambodia.
As of 9 December 2025, BJC has closed two Big C hypermarkets in Ubon Ratchathani, one Big C hypermarket in Poipet and eight Big C Mini stores. The revenue contribution from the closed stores is small (less than 1%). Still, if border conflicts worsen and spread to more regions in Thailand, management expects a more meaningful sales impact. Based on discussions with management, the revenue contribution from all Cambodia border stores could be 3%-4% of total Big C sales.
Short-term supporter could come from improving tourist numbers. We are starting to see a recovery in monthly tourist arrivals. The y/y contraction had peaked in July 2025, and by October and November, the monthly declines had narrowed to 4% and 7%, respectively. BJC has identified c.25 Big C Hypermarket stores (representing a high-teen percentage of total Big C sales) as tourist stores. The improving tourist numbers should benefit these locations, which typically carry tourist-oriented products that generate higher margins compared to standard grocery products.
Government to launch Co Payment Plus – Phase 2. The Ministry of Finance plans to propose the “Khon La Khrueng Plus” Phase 2 scheme to the Cabinet next week to support continued spending into next year. The program is expected to offer 10mn entitlements, providing THB2,000 per person. Registration is targeted for late December 2025, with spending beginning in January 2026.
The first 5 million entitlements will be reserved for individuals who have never participated in the scheme, as well as residents in areas affected by flooding and provinces impacted by border conflicts with Cambodia. The remaining 5mn entitlements will be open to those who previously joined the program.
In general, we believe the consumption in the co-payment programme was mainly in F&B shops and restaurants. We note that Big C also has traditional trade owners and small restaurant owners under their customer profile which should indirectly benefit from the scheme.
In addition, the company introduced the Don Jai model, where the company has partnerships with traditional trade owners to supply their products to Big C. These shops are mostly eligible to participate under the Co-payment Upgrade scheme. Currently, there are c.17,000 Don Jai shops contributing c. 3-4% of Big C sales.
Recommendation
Reiterate HOLD with lower TP of THB17.00 (vs. THB20.00 previously). We fine-tuned our earnings forecast by 1% for FY25F/FY26F to account for higher refinancing costs and increased finance lease expenses from the new distribution center. Over the mid to long term, we have adopted more conservative gross margin expansion for Big C given rising competition and have lowered our terminal growth rate from 1.75% to 1%. Our DCF-based TP thus slides to THB17.00 (WACC of 8.4%). With limited upside to our new target price, we keep our HOLD call.
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