INVX Food Sector CEO Day: Management teams broadly highlighted improving industry fundamentals and long-term growth opportunities, with TFG benefiting from retail transformation and a livestock recovery cycle, ITC maintains strong demand visibility, with transformation initiatives expected to continue supporting margin expansion in 2027, TU highlighting solid demand visibility in 2H26 while targeting margin expansion and long-term growth through its Strategy 2030 roadmap (supported by growth contributions from both ITC and TFM), and TFM expecting a 2H26 recovery while positioning Ecuador as its next major growth platform. TU remains our sector pick, supported by improving earnings visibility and resilient margins.
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Food – Food Sector CEO Day: LT growth story intact
TFG: Retail transformation and an improving livestock cycle support the next phase of growth. Thai Foods Fresh Market remains TFG’s key growth engine, with retail contributing ~48% of group revenue. The company operated 748 stores at end-2Q26 and plans to expand its network by 200-250 stores annually over the next three years, while continuing to broaden its product offerings to support growth. TFG believes the livestock cycle bottomed in 2Q26, with improving demand, disciplined supply, and manageable disease risks expected to support a gradual recovery in both pork and chicken prices. Feed costs are expected to remain manageable, supported by relatively low raw material prices, forward purchases, and the use of alternative feed ingredients, despite potential volatility from El Niño. TFG targets 2026 revenue growth of 10-15% and a long-term revenue CAGR of 15%, supported by continued retail expansion, growth opportunities in Vietnam, and ongoing investments across its supply chain and production infrastructure.
ITC: Strong demand visibility, margin resilience and strategic expansion support long-term growth. Management raised its 2026 sales growth guidance to 17-20% YoY in USD terms, reflecting confidence in demand driven by innovation, premiumization and continued market share gains despite a modestly growing global pet food market. Gross margin guidance of 23-25% was maintained, supported by 2H26 price recovery initiatives to offset higher logistics and raw material costs. Looking ahead, ITC expects further profitability improvement from its transformation program, which remains on track to deliver US$50mn of operating profit uplift in 2027 and should provide additional margin uplift through lower SG&A once the program is completed in April 2027. M&A remains a key pillar of ITC’s 2030 growth strategy, with the company targeting US$500mn of acquisition-driven revenue and actively pursuing strategic growth opportunities in the US market.
TU: Improving demand, resilient margins and long-term transformation initiatives support a stronger growth outlook. Management raised its 2026 sales growth and gross margin guidance, reflecting stronger demand across Ambient, Frozen and PetCare, a more favorable product mix and continued cost efficiency gains. Despite elevated tuna prices driven by the FAD ban and El Niño, management remains comfortable with current raw material conditions given sufficient inventory coverage and expectations for tuna prices to normalize toward year-end, while US tariffs are viewed as manageable and potential tuna loin exemptions, UK tariff benefits and a Thailand-EU FTA could provide additional upside to competitiveness and earnings. Looking ahead, TU’s Strategy 2030 focuses on margin expansion through cost optimization, operational efficiency and a richer product mix, with future growth supported by ITC’s organic expansion and M&A opportunities, as well as TFM’s capacity expansion and expansion into Ecuador.
TFM: 2H26 recovery expected despite near-term pressure from weak aquaculture conditions and high fishmeal costs. Sales in 1H26 were affected by weak shrimp farming economics in Thailand and business restructuring in Indonesia, although improving shrimp prices, recovering stocking activity and stronger Indonesian sales momentum are expected to support a rebound in 2H26. While record-high fishmeal prices remain the key earnings headwind, management believes the worst may be over and expects prices to gradually normalize as supply-demand conditions improve. Despite lowering its 2026 sales growth and gross margin guidance, management remains confident in delivering within the revised targets through formulation optimization, product mix enhancement and disciplined cost control. Looking ahead, the Ecuador aquafeed project, which is expected to commence commercial operations in 2H28, represents a transformational growth.
Key risks. Weak prices from fragile purchasing power and more supply, high feed costs and a strong THB. Key ESG risks are GHG emissions, waste & water management (E), customer welfare, product quality, health & safety policies (S).