Equity Analysis /
Thailand

Siam Makro PCL: 3Q22 preview: makro operation to be the driver

  • Cash & carry to drive 3Q22 earnings

  • Persisting cost pressures at Lotus’s in 3Q22

  • Cost pressures should ease in 2023 onward

Bualuang Securities
11 October 2022

Strong recoveries in sales to HoReCa and retail customers should make for a hefty 3Q22 makro performance; Lotus’s’ numbers will remain weak. Looking to 4Q22, we expect seasonality and the ongoing recovery to make for YoY and QoQ growth.

Cash & carry to drive 3Q22 earnings

Our MAKRO 3Q22 core profit estimate is Bt1,564m, flattish YoY and QoQ. Although financial costs for Lotus’s will have surged YoY and QoQ, we believe that makro’s cash & carry operation will have held the line. Recoveries in sales to HoReCa and retail customers (together, about 54% of sales) should have made for standalone makro SSSG of 11% and sales growth of 13% YoY in 3Q22 (Figure 1). Hence, our standalone makro core profit estimate is Bt1,744m, up by 9% YoY and 29% QoQ. With strong SSSG, standalone makro GM should have fattened slightly YoY and QoQ.