On Monday at 10:43 AM (Bangkok time), the share price of Charoen Pokphand Foods Public Company Limited (SET: CPF) rose by 2.54% or THB 0.60 to THB 24.20, with a trading value of THB 679.25 million.
Finansia Syrus Securities gave a ‘BUY’ recommendation for CPF and upgraded its target price to THB 28.00 per share. The analyst expected CPF to record a net profit of THB 5.2 billion in 2Q24, signifying a notable 353% quarter-on-quarter increase and potentially marking its highest earnings in the last ten quarters. The anticipated surge in CPF earnings was attributed to the uptick in pork prices in Thailand, China, and Vietnam, with normal profit expected to reach THB 4.2 billion, excluding biological gains, representing an 11.6x quarter-on-quarter growth.
Looking ahead to the second half of 2024, CPF was anticipated to experience sustained growth, spurred by the attainment of the break-even threshold for meat prices. The analyst also adjusted upward the 2024 forecasted earnings for CPF by 15% to THB 14 billion, marking a significant turnaround from the THB 5.2 billion loss reported the previous year.
Maybank Securities (Thailand) raised the target price for CPF to THB 28.10 per share utilizing the sum-of-the-part method. The enhanced profit outlook for the company reflected a favorable trajectory in the rebound of pork businesses in Thailand, Vietnam, and China amid price hikes and supply constraints. The analyst anticipated a robust performance from CPF in the second quarter of 2024, with further growth expected in the third quarter due to seasonal trends, rising pork prices, and declining animal feed expenses.
According to a research report by UOB Kay Hian analyst, Charoen Pokphand Foods appears to be on track for a significant earnings improvement in the second quarter. The brokerage has revised the stock’s target price upward to THB29.00 from THB25.10 and maintained a buy rating.
The agro-industrial and food conglomerate is anticipated to transition to a core profit in the second quarter, as opposed to a loss reported a year earlier. This turnaround is expected to be driven by the surge in Thailand’s swine prices, elevated prices in Vietnam, and improved equity income, largely attributed to China’s swine prices reaching breakeven levels.
Moreover, the analyst highlights that Charoen Pokphand Foods is likely to reap the benefits of its business reorganization in 2023, with initial results expected to manifest this year.
