Last year was rough for the Thai economy. With (what some call) a junta lacking the competence to run a country now in power, Thailand went through a disappointing first half.
It wasn’t until recent GDP growth figures that people started feeling differently about those in charge.
Thailand looks to achieve the highest growth it’s had during its several years of political turmoil. Analysis shows that the agricultural sector does well in most countries, even through harsh economic times.
For Thailand, agriculture is the core essence of the nation’s economy and has been for hundreds of years.
In Thailand’s agri-sector, InvestAsian believes that the time is ripe to pick Thai Vegetable Oil PCL (BKK:TVO) as the new year addition to your portfolio.
Thai Vegetable Oil Stock
One of the oldest companies in the industry, Thai Vegetable Oil was established back in 1985. The company manufactures and distributes soy meal and soybean oil. They have a production capacity of over 6,000 tons of soybean per day.
Thai Vegetable Oil has many product lines. But its flagship products are A-Ngoon soybean oil for general household cooking purposes, along with several different types of animal feed with names starting with “TVO” – an acronym of the company’s name.
Strong Rooted Fundamentals
Just as a plant needs strong roots, a company needs strong fundamentals to stay alive and perform well during rough times.
TVO boasts great fundamentals. With a current ratio of more than 2.5 and barely any long term debt, the firm is well-positioned for aggressive expansion.
With experience and stability which comes with being the third biggest company in the market, TVO is in a great place for further growth.
Low P/E, High Dividends
Despite being third in terms of market capitalization, TVO stock features an ROI which is second to none.
The firm’s ROI and ROE of 24% outshines its bigger competitors. Furthermore, TVO is one of few companies which has consistently performed better every year. This is highly significant considering recent problems in the Thai economy.
In addition, their P/E ratio stands at only around 8.5. TVO also has an extremely high dividend yield of over 8% – one of the most impressive on the Thai stock exchange.
Net profit margins are expected to exceed 10% this year, a steep upgrade from the latest reported figure of 6.8%. All of these factors mean a bright future for Thai Vegetable Oil stock.
Looking to buy stocks in Thailand? You might want to see our analysis of Group Lease stock which is Southeast Asia’s largest vehicle leasing company.
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