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Big C Drops Most in 9 Months After Profit Slumps: Bangkok Mover

Big C Supercenter Pcl (BIGC), the Thai unit of Casino Guichard-Perrachon SA (CO), slumped the most in nine months in Bangkok trading after reporting an unexpected drop in first-quarter profit.

Big C, the country’s second-biggest operator of hypermarkets by number of stores, slid 6.5 percent to 229 baht at the trading break, poised for biggest decline since July 23. The stock was the biggest loser in the SET100 Index.

Net income in the first quarter fell 21 percent from a year earlier to 1.4 billion baht ($47 million) as higher wages, utility bills and insurance premiums increased expenses. That trailed the average estimate of 1.84 billion baht profit in a Bloomberg survey of eight analysts.

“Cost pressures from minimum wage and utilities seem more prominent than expected,” Kae Pornpunnarath and Ebru Sener Kurumlu, analysts at JPMorgan Chase & Co., said in a note to clients today. Decline in gross profit margin “reflects strong competition in the hypermarket segment and initial cost of penetrating into a new store format,” they said.

JPMorgan downgraded Big C to neutral, the equivalent of hold, from overweight, citing “disappointing” earnings. CIMB Securities (Thailand) Co. Ltd. cut the stock to underperform, the equivalent of sell, from neutral.

Big C has implemented cost-control measures to mitigate the increase in operating expenses in 2013, Big C said in a statement to the stock exchange. The company’s shares have gained 11 percent this year, trailing a 16 percent increase in the benchmark SET Index.

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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