Tisco Securities has upgraded Thailand’s food sector to overweight from neutral, citing signs of recovery in livestock markets and easing input costs. The upgrade, effective Wednesday, follows a sharp decline in sector profitability during the second quarter of 2026, when net profit fell 58% year-over-year to 6.9 billion baht despite a modest 2% drop in revenue to 200 billion baht.
The earnings slump was driven by a 31% year-over-year fall in swine prices, weaker poultry prices and sustained high feed costs, including an 8% year-over-year increase in corn prices. Regional market conditions also weighed on performance, with swine prices in China and Vietnam remaining subdued through the first half of 2026.
Analysts now expect a rebound in the livestock segment during the second half of 2026, supported by tighter supply conditions that are projected to normalize over the next 12 to 18 months. Livestock prices for Thai chicken and swine began recovering in July and August, while chicken export orders remain robust amid ongoing European Union restrictions on Brazilian poultry imports.
Feed costs are showing early signs of moderation as corn prices decline, further supporting margin recovery. Overseas markets are also improving, with swine prices in China and Vietnam beginning to stabilize following government supply-control measures. Tisco Securities has identified TFG, CPF and BTG as top stock picks within the sector.
