On Monday at 10:58 AM (Bangkok time), the share price of Charoen Pokphand Foods Public Company Limited (SET: CPF) rose by 1.23% or THB 0.30 to THB 24.70, with a trading value of THB 147.40 million.
Krungsri Securities (KSS) anticipates a mildly optimistic outlook for CPF following an analyst meeting, where a more transparent outlook on meat prices and costs, as well as the company’s strategies for the fourth quarter of 2024 and 2025, were discussed. The analyst foresees a rise in pork prices in Thailand, with stable prices in China and Vietnam, while projecting a slight dip in poultry prices. Additionally, there is an expectation for cost to decrease. KSS predicts CPF will emphasize the distribution of processed food.
The analyst upgrades CPF’s 2024 full-year net profit forecast by 16% but downgrades the 2025 forecast by 3%, as the company is expected to record lower biological asset value due to lesser volatility on pork prices in Thailand and Vietnam.
KSS maintains a ‘BUY’ recommendation for CPF, revising the target price for 2025 to THB 30 per share (from the previous THB 31).
In addition, DBS Vickers Securities (Thailand) expects CPF’s core profit in the fourth quarter of 2024 to decline quarter-on-quarter, primarily driven by reduced pork prices in Vietnam and China. Although a decrease in domestic poultry prices is anticipated on a quarterly basis, the company’s profit is projected to increase year-on-year.
For 2025, the analyst projects domestic pork prices to range between THB 72-73 per kilogram, up from THB 68-69 per kilogram in 2024. This uptick is linked to a surge in demand, coupled with diminished market supply following recent floods, the African Swine Fever (ASF) situation, and a reduced number of small farms. CPF is also set to elevate its pig fostering capacity from the current 6.5 million to 7 million in 2025. Moreover, raw material costs are expected to decrease by 4-5% year-on-year in 2025, primarily driven by increased production and the easing of tensions in the Russia-Ukraine conflict.
DBS Vickers Securities (Thailand) issues a ‘Hold’ recommendation for CPF, establishing a base price of THB 27.50 per share. The analyst’s forecast leans towards a more cautious approach compared to the company’s outlook, considering the inherent volatility in agricultural product prices.
