5 brokerages forecast CPALL's 4Q23 profit, expecting profit to reach 4,500-5,000 million baht, growing 51-67% compared to 4Q22, accepting the strong recovery of 7-Eleven and CPAXT businesses and ready to recommend buy.
Correspondents report that most analysts have come to estimate CP All Public Company Limited or CPALL's earnings for the 4th quarter of 2023, most of which are expected in this quarter. Both 7-Eleven and CP Extra Public Company Limited (CPAXT) will have good profit growth both QoQ and YoY, with key supporting factors.
CPALL's net profit for the 4th quarter of 2022 was 3,137.73 million baht, while for the full year 2022 it was 13,271.71 million baht. Analysts estimate that this 4th quarter 2023 profit will reach around 5,000 million baht profit. CPAXT will have an annual growth of approximately 17,985 million baht or 35.51% through 2023.
*** Bualuong Securities raises Q4/2023 profit forecast to 64% YoY, taking better results from 7-Eleven and CPAXT.
Bualuong Securities estimates that the 4Q23 profit trend may be higher than previously expected, with a recent estimate of 4,756 million baht, an increase of 64% YoY and 12% QoQ, with key supporting factors coming from both 7-Eleven and CPAXT. As a result, overall same store growth (SSSG) will grow 3% YoY and revenue will increase 7% YoY, QoQ.
In addition, the ratio of sales, including the average price of finished goods, has changed for the better. And healthcare groups popular among tourists combined with reduced costs will support higher profit margins with an expected EBIT margin of 4.9%. The brokerage slightly increased its profit forecasts for 2023-2025 to reflect the new profit margin. Core profits are currently expected to grow from 5% revenue growth to 20% annual growth in 2024, with costs falling in both interest expense (CPAXT) and electricity costs.
Meanwhile, the current PER is 23.1 times, lower than the average of 31.2 times. In addition, the proportion of shares held by foreign investors is the lowest in 7 years at approximately 39% of the new target price of 68 baht. Profits have increased from the original forecast of 66 baht following an increase in estimates.
*** Krungsri Patanasin Securities Q4/2023 profit reaches 4.8 billion baht, helping to reach 17.4 billion baht for the full year.
Krungsri Patanasin Securities expressed a 'slightly positive' outlook on its normalized profit trend for 4Q23 at 4,850 million baht, a 67% year-on-year increase and 14% QoQ increase, slightly better than the broker's original expectation. Gross profit margins increased sharply YOY from 7-Eleven stores expected to continue to grow. According to the mix of higher margin products and there were no records of special personnel costs as in the 4th quarter of 2022. QoQ was supported by the profitability of CPAXT, in which CPALL has a 60% stake, which is expected to grow significantly from the peak season. Lotus Travel and Business had better recovery, especially SSSG increased by 5%
However, if the 4th quarter of 2023 is as expected, it will support a slight upside to normalized profit for the whole of 2023, increasing by 2% to 17,400 million baht, a 31% year-on-year increase. A retail group studies brokerage strategies. We recommend buying at a target price of 76 baht.
In terms of direction to 2024, the brokerage expects normalized profit in convenience stores to continue growing at 25%, with easy e-receipt supporting SSSG in January 2024 at another 3% and wholesale trade groups. Large retail group Lotus business has recovered for a full year. In this regard, the value is still cheap, the share price trading on PER in 2024 is 24 times lower than the historical average of -2.0 SD. Therefore, it is recommended to buy and select the best stocks in the group with CPAXT with a price target of 34 Baht
*** Land and Housing Securities raises its target price to 82 baht, seeing it as a retail stock that will benefit the most from digital wallets.
Land and Housing Securities expects 4Q23 profit to grow by 7% QoQ and 51% YoY from 7-Eleven, which has grown very well and CPAXT profit growth of 25% YoY to come in at 4,700 million baht with good profit growth. Businesses, the 7-Eleven convenience store business posted same-store sales growth of 3.5% following the tourist season and a clear recovery in the tourism sector. And sales increased by opening 700 new branches per year.
Meanwhile, gross profit margin increased by around 20 bps YoY, mainly driven by positive results from the tourism sector from the sales rate of personal care, ready-to-eat and all cafe products. SG&A and sales ratio decreased as a special bonus was not recorded as in the same period last year. CPAXT's business, in which CPALL holds 59.92% stake, has outperformed both MAKRO wholesale business and LOTUS retail business, including lower electricity prices following the government sector's reduction in per unit electricity consumption rates, which is expected. CPALL's full-year 2023 profit will grow approximately 33%, higher than our estimate of approximately 2%.
This year's target price of 82 baht is still upside, and recovery growth continues to improve. It is expected to be the retail sector that will benefit the most from the government's 10,000 baht digital wallet initiative, as it has branches spread across Thailand in every district. This results in confirmation, buy-in and selection as the best selection panel.
*** Buy Securities expects Q4/2023 profit to grow strongly, reaching the highest point of the year, with expected profit of 4.9 billion baht.
Bi Securities expects 4Q23 profit, with normalized profit at 4,900 million baht, a 68% year-on-year increase and a 14% Q0Q increase, the highest point of the year. With profit recovery from CPAXT (Macro and Lotus), same-store sales are expected to grow 3%, while the share price has fallen more than 9% year-to-date in 4Q23. -4% over the SET index during the same period. I see it as an opportunity to collect more. In uncertainty about digital wallet
The brokerage expects normalized profit to expand 26% year-on-year in 2024, driven by sales of ready-to-eat food groups, excluding factors from digital wallets. A group of individual objects that grows as the journey progresses. 4, regular returning tourists are recommended to purchase at a base price of 72 baht including reduced financing costs
*** Yuanta Securities CPALL business expects 5 billion baht profit during Q4/66 in both retail and wholesale.
Yuanta Securities expects 4th quarter 2023 profit to be in the range of approximately 4,500-5,000 million baht, taking full-year 2023 profit into account. 17,485-17,985 million baht, with operating results growing both QoQ and YoY. Revenue is expected to grow well in both the CVS retail and wholesale businesses. Meanwhile, as the business enters the high season, capital expenditures have decreased due to lower electricity costs and expenses at CVS, which will not record higher employee cost adjustments in the 4th quarter of 2022, and will also benefit from lower interest costs after CPAXT. We recommend buying at target price of 74 Baht after completion of loan refinancing.
| Broker | Expected profit Q4/66 | Target price | recommendation |
| Bualuang Securities | 4,756 million baht | 68 baht | buy |
| Krungsri Patanasin Securities | 4,850 million baht | 76 baht | buy |
| Land and Housing Bonds | 4,700 million baht | 82 baht | buy |
| Bag bonds | 4,900 million baht | 72 baht | buy |
| Yuanta Securities | 4,500-5,000 million baht | 74 baht | buy |
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