We like CPN for its ongoing mall traffic recovery story and because it is only negligibly exposed to the risk of profit squeeze brought on by higher costs—there is very little inflation-related risk to our earnings forecast. As such, the stock price is likely to outperform Retail peers. Moreover, we expect CPN’s profit beat to prompt street earnings projection-upsizing, which could trigger a short-term price rally. Our BUY call stands to a DCF-derived YE22 target price of Bt76. BUY!
Profit beat our estimate (slightly) and the consensus (by 11%)
CPN reported a 2Q22 core profit of Bt2,546m, up by 122% YoY and 10% QoQ. Including a Bt345m extra gain from selling a 10% stake in the Dusit Central Park project to DUSIT, net earnings were Bt2,752m, up by 117% YoY and 27% QoQ. The bottom-line was 5% above our estimate (and 11% ahead of the street), due to higher revenue and a fatter GM than assumed.