Tisco Securities upgrades Thai food sector to overweight

Investing.com -- Tisco Securities upgraded Thailand's food sector to overweight from neutral on Wednesday, citing expectations of a strong earnings recovery in the second half of 2026 after the industry reached its lowest point earlier this year.

The brokerage firm said it expects the livestock sector to recover in the second half of 2026, with improvements in both revenue and profit margins. Thai chicken and swine prices have rebounded after hitting bottom in the second quarter of 2026, driven by tightening supply conditions that are expected to take another one to 1.5 years to normalize.

Chicken export orders remain strong, with additional support from continued European Union restrictions on Brazilian chicken imports. Feed costs are starting to ease following a decline in corn prices.

Overseas markets are improving, with swine prices in both China and Vietnam showing signs of recovery following supply-control measures, Tisco Securities said.

The second quarter of 2026 marked the lowest point of the cycle, with the sector's net profit falling 58% year-over-year to 6.9 billion baht despite revenue declining only 2% to 200 billion baht. The earnings drop was mainly driven by a 31% year-over-year decline in swine prices, weaker chicken prices, and high feed costs. Corn prices increased 8% year-over-year.

Weak swine prices in China and Vietnam during the first half of 2026 further weighed on earnings. Livestock prices began to recover in July and August, while corn costs have started to decline.

Tisco Securities' top picks are TFG, CPF and BTG.

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