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Poodles Craving Gourmet Meals Spur 200% Jump in Seafood Firm

Updated on
  • Asian Seafoods Coldstorage says premium pet food is booming
  • Company is the top-performing stock in Thailand this year

Finicky cats and dogs may be a handful for owners but they are good for business at Asian Seafoods Coldstorage Pcl, the best performing stock in Thailand this year.

Growing sales of premium pet food have contributed to a 204 percent jump in the company’s shares this year through Monday, the most among almost 600 publicly traded equities on the Stock Exchange of Thailand’s main board. Revenue is on course to reach 14.5 billion baht ($427 million) in 2020 from 9.2 billion baht last year, Chief Financial Officer Hendrikus van Westendorp said in an interview.

“The pet food business will continue to be our main growth driver, with strong growth outlook and a high profit margin,” van Westendorp, 53, said in his office in Samut Sakhon province, near Bangkok, on Monday. “Most people are willing to spend on premium foods for their pets.”

Asian Seafoods’ shares closed 5.8 percent higher at 14.50 baht in Bangkok on Tuesday, snapping a three-day slide. The benchmark SET Index dropped 0.3 percent.

The company provides pet food for brands including Rachael Ray Nutrish in the U.S., Applaws in the U.K. and Aixia in Japan. It’s tapping into a trend in rich nations toward the humanization of such products, which is stoking demand for gourmet offerings containing natural ingredients. About a quarter of revenue came from the pet food business in the first quarter, up from 4 percent in 2014, data from Asian Seafoods show.

Van Westendorp said the company is targeting:

  • About 4 billion baht of pet food sales in 2020, up 150 percent from 2016
  • A 25 percent climb in seafood sales to 7.5 billion baht in the same period
  • Profit margin of at least 10 percent versus 8.4 percent last year

The recent increase in the company’s profit is impressive but the question is whether Asian Seafoods can keep finding the customers needed to make the most of its investment in pet-food capacity expansion, said Ploenjai Jirajarus, an analyst at Capital Nomura Securities Pcl in Bangkok.

Exports make up around 62 percent of the firm’s sales. First-quarter net income was 105.8 million baht, up from 10.8 million baht a year ago. The stock surged in the weeks after the earnings report in mid-May.

The shares, listed in 1994, trade at 13.7 times estimated 12-month earnings, compared with a five-year average of 11.9 times.

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