Dimension Stock-CPAXT from LH Securities expects net profit during the first quarter of 2024 to reach 2,653 million baht, a decrease of 19.2% q-o-q after seasonal results, but an increase of 22.5% y-o-y, mainly from business MAKRO as same store sales increased. 3-5% YoY fresh food sales improved significantly including sales increase from opening another branch by approximately 2% YoY, with the Mahachai branch changing from LOTUS to MAKRO Since the end of last year, MAKRO has had GPM decreased By about 10 basis points year over year and he had expenses. The effect of overlapping costs for two distribution centers is typical of the opening of a new distribution center in Wang Noi. Close to the original center which started providing service from November. 66 of MAKRO has a plan to gradually move the warehouse from the old center to the new center to be completed during the last quarter of 2067, while the LOTUS business has an increase in same-store sales of approximately 6-8% year-on-year, but sales in the newly opened branches This was offset by the closure of Lotus Go Fresh branches that were not profitable.
Including changing one large LOTUS branch, the Mahachai branch, to MAKRO instead, while LOTUS' GPM was stable year-on-year, although sales of fresh food, which had a high GPM, improved, but This was compensated for by sales of electrical products, which rose. GPM was very low, with sales of electrical appliances increasing from 5% of total sales to 6%, which achieved positive results as a result of the extremely hot weather, in addition to LOTUS developing a marketing plan to stimulate sales of electrical appliances. . This makes the cooling unit a particularly good seller. Meanwhile, the marketing plan to stimulate LOTUS sales results in the SG&A/Sales ratio of LOTUS remaining stable year-on-year. As a result, CPAXT's EBIT in 1Q24 is expected to increase by only 2% YoY, but there is expected to be a positive outcome of lower financial costs of 22.6% YoY from the issuance. To repay the US currency loan, which has a high interest rate, it is expected to be the main factor that helps push Q1 2024 earnings to grow by 22.5% year-on-year.
In this regard, Q2 2024 earnings are expected to continue to grow well year-on-year from the crowded tourism sector. As the number of foreign tourists continues to recover, it is positive for fresh food sales growth for both MAKRO and LOTUS, and LOTUS refrigeration unit sales are also expected to continue to sell well. The weather is very hot during the month of April. Until mid-May, in addition to the continuation of the synergy strategy between Makro and Lotus.
By using MAKRO's strengths to help manage the fresh food division, LOTUS enjoys better sales of fresh food products. LOTUS' strengths in managing leased space will help MAKRO's leased space income grow by leaps and bounds. As a result, we expect CPAXT's profits this year to grow by at least 20%, moreover, after the MAKRO and LOTS businesses are controlled under the same company. It will help increase efficiency and flexibility in management. Helps support long-term growth plus the target price for this year is 36 baht with an upside of 16%, which confirms a buy.
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