Phillip Securities (Thailand) released an analysis on April 4, 2025, suggesting a “Buy” recommendation for Charoen Pokphand Foods Public Company Limited (SET: CPF) with a target price of THB 29.50 per share for 2025.
In March, pork prices in Thailand surged to THB 86 per kilogram, marking a 13.2% increase from the year’s start at THB 76 per kilogram. Meanwhile, January’s pork price in Vietnam remained high at VND 61,850 per kilogram, exceeding the second half of 2024’s average price of VND 61,000 per kilogram.
The company projects that Thai pork prices will stay above THB 80 per kilogram in the second half of the year. At the same time, the prices of animal feed ingredients, such as corn and soybean meal, are expected to continue declining.
Research indicates that sustained high pork prices in Thailand and Vietnam, coupled with low raw material costs, will stabilize the gross profit margin (GPM) in 1Q25 close to 4Q24’s level of 15.5%.
CPF anticipates reaching a revenue of THB 143,750 million in 1Q25, a decrease of 3.2% from the previous quarter (q-q), yet an increase of 2.7% from the same period last year due to seasonal factors. Typically, sales in Q1 are lower than in Q4.
The GPM is expected to be 15.5%, slightly down by 20 basis points from the prior quarter but substantially up by 350 basis points from the previous year. The first quarter of 2024 suffered from the impact of illegal pork imports. The ratio of selling, general, and administrative expenses to sales (SG&A/Sales) is projected at 8.9%.
Despite these variations, CPF’s net profit for 1Q25 is forecast at THB 4,569 million, a 9.5% increase from the previous quarter and a substantial 296.6% rise from the previous year.
