Volatility from geopolitical tensions and trade wars has severely shaken export industries, especially due to the U.S. tariff policy commonly known as the "Trump Tax," which has heavily pressured costs and squeezed profit margins for many companies.
Amid this storm, Thai Union Group Public Company Limited (TU) has stood out with strong performance, thanks to its business strength that investors seek during such times: "pricing power," allowing it to pass higher costs onto selling prices while still achieving sales growth.
Over the past year, one major headache for Thai exporters has been the "Trump Tax," effective from April 2025, which has hit many companies hard with rising costs, shrinking margins, and stalled profits.
However, Thai Union Group Public Company Limited (TU), the leading Thai seafood market player owning brands like Sealect, Fisho, and i-Tail, offers an interesting case. Instead of merely "defending," it chose to "adjust its strategy," and the results have been clear.
In Q1/69, the company posted a net profit of 1.113 billion baht, up 9.2% from the previous year, with sales of 32.054 billion baht, a 7.6% increase — the strongest growth in 15 quarters, or since Q3 2022.
TU’s success lies not just in selling more but in its "pricing power." The company raised prices across several product groups to offset higher tax costs, and notably, customers continued to "buy."
In other words, TU didn’t merely pass costs onto customers; customers accepted the new prices. This is the true meaning of pricing power.
However, comparing Q1/69 to Q4 2025 on a quarter-to-quarter basis, total sales declined by 8.5%, which the company attributes to seasonal factors during the off-peak selling period.
Thanks to effective cost management, the company still managed to grow net profit by 9.9% from the previous quarter, demonstrating organizational flexibility in adapting and responding.
Examining earnings by business segment shows pet food (PetCare) has emerged as a star, generating sales of 5.115 billion baht, up 22.6% year-on-year.
This growth stems from increased sales volumes driven by sustained strong demand in key markets such as the U.S., Europe, and Asia, along with a focus on premium products, which now account for over half (51.5%) of total sales, maintaining a high gross margin of 24.9%.
Another strong performer is the frozen seafood business, with sales of 9.42 billion baht, growing 11.6% year-on-year. Sales volumes in this segment have steadily recovered for four consecutive quarters.
This growth is supported by sales of pet food and frozen shrimp. Despite higher selling prices, frozen shrimp sales grew due to strong demand and the return to normal buying patterns by customers in the U.S. market.
The processed seafood segment, the company's traditional core, recorded sales of 15.136 billion baht, a 2.5% increase. The company maintained revenue balance by raising prices in both the U.S. and Thai markets to offset tax costs, alongside sales volume growth in Europe.
Meanwhile, the value-added products segment was the only one to see a slight sales decline of 1.2%, mainly due to slower sales in the U.S. and Japanese markets.
Equally important as revenue growth is cost management. Despite pressure from U.S. import taxes causing a slight drop in gross margin this quarter, TU managed the situation well.
Selling and administrative expenses decreased by 1% year-on-year, thanks to the ongoing Sonar project aimed at serious cost reduction, enabling continued profit growth.
Additionally, a positive development came when the U.S. Supreme Court ruled that previous tariff increases exceeded executive authority, temporarily lowering tariffs to 10% for 150 days.
This not only helps restore normal competition but also clarifies product pricing and allows the company to potentially claim refunds for taxes already paid in the future.
Analysts at Krungsri Securities Public Company Limited believe that in the medium to long term, the pet food business will be a key growth driver, benefiting from the Pet Humanization trend that boosts premium product shares and strengthens pricing power beyond that of human food.
For the full year 2026, they remain confident and maintain a normal profit forecast of 5.135 billion baht, a 19% increase from the previous year, supported by a weaker expected baht appreciation than last year and visibly lower selling and administrative expenses after the Sonar project concludes.
They therefore maintain a "buy" recommendation, with a target price of 14.20 baht per share.
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