Analyst Expects CPF’s 2Q Profit to Jump 56% as Higher Swine Price, Giving a TP at ฿43
Analyst Expects CPF’s 2Q Profit to Jump 56% as Higher Swine Price, Giving a TP at ฿43
Analyst Expects CPF’s 2Q Profit to Jump 56% as Higher Swine Price, Giving a TP at ฿43
23 ก.ค. 2563

Analyst has given a “BUY” recommendation on Charoen Pokphand Foods Public Company Limited (CPF) at the target price of ฿43/share, expecting to post 2Q20 core profit of 6,395 million baht (+56%) in response to higher swine price, also upgraded 2020 earnings preview to increase by 32% from a previous forecast of 25,192 million baht after its subsidiary in Hong Kong namely CPP signaled a profit jump of USD 310 – 330 million (+278%).
 
Asia Wealth Securities (AWS) expected 2020 to be a golden year of CPF due to the improving swine price across the world and has upgraded its recommendation from Speculative Buy to “BUY” with a target price of ฿43/share, up from ฿33/share.
 
The swine price and demand were affected by the Covid-19 pandemic, but as of present,  prices already showed an improvement following lockdowns easing. Moreover, CPF has a positive factor from the African Swine Fever (ASF) outbreak in Vietnam. 
 
CPF on July 21, 2020 has reported that C.P. Pokphand Co., Ltd. (CPP), an Hong Kong-based subsidiary, is expected to book profit of between USD 310 – 330 million for the first six months, an increase of 278% year-on-year, mainly benefited from a surging pork price in Vietnam and the effect on the fair value of its biological assets in livestock business in Vietnam has also decreased. CPF is anticipated a 2Q20 profit of 6,395 million baht (+56% YoY, +5% QoQ)
 
Therefore, AWS has revised its 2020 earnings forecast, seeing a growth of 32% in 2020 and 21% in 2021 from a previous forecast of 25,192 million baht and 24,375 million baht respectively.
 
Maybank Kim Eng (Maybank) foresaw CPP’s 2Q20 of USD 177 – 197 million, resulting from profit records from fair value changes and a tendency of higher profit margin ratio from a surging swine price in Vietnam by 108% year-on-year.
 
However, Maybank believed CPF to recognise a lower share profit than expected from CP All Public Company Limited (CPALL) and estimated CPF to post a 2Q20 profit of 4,410 million baht (+13% YoY) and will stronger in 3Q20 due to the recovery of swine price in Thailand and pork price in Vietnam remains high. Recommended “BUY” at target price of ฿39.20/share  