RBF: Strong Performance and Resilience Are Already Priced In

We keep our HOLD recommendation on RBF and reduce our target price to Bt8.70 from Bt9.25, implying a downside of 8% from the current price. We derive our target price from a 30% premium to the 2021E PB/ROE ratio of Asia ex Japan Consumer Staples due to RBF’s resilient business model.

Investment thesis:

• Aggressive expansion to capture overseas growth opportunities, but already priced in
• Strengthened relationship to Japanese partner enables profit boost
• Improved raw material management enhances cost-efficiency

Interim: A strong 3Q20 YoY where revenue grew by 21%, and gross profit margin expanded 2.2 ppts. We adjust our overall gross margin forecast upward but stay cautious about high growth opportunities in the long run.

Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers.