Equity Analysis /
Thailand

CP All: 7-Eleven traffic recovery to make for strong 4Q22 numbers

  • CPALL should mark a strong earnings recovery for 4Q22

  • Product price rises and merchandise mix changes to push up GM

  • Ongoing recoveries at 7-Eleven and MAKRO to drive 2023 profit

Bualuang Securities
24 January 2023

The profit growth driver for 4Q22 and 2023 is rising sales. And we expect earnings expansion to be sustain-ed through 2024-25. CPALL is a play on rising Thai spending and sharply higher tourist arrivals. Also, the stock trades at a discount to MAKRO. BUY!

CPALL should mark a strong earnings recovery for 4Q22

Our model points to a 4Q22 core profit of Bt4,121m, up by 47% YoY and 8% QoQ. Pegged to assumed 4Q22 SSSG of 12%, we estimate revenue of Bt218,505m for the quarter, up by 22% YoY and 5% QoQ. Stripping out the makro and Lotus’s operations, we expect the standalone 7-Eleven biz to mark YoY and QoQ growth in revenue and earnings, led by the ongoing recovery in traffic and seasonality. Our conservative 7-Eleven mean traffic assumption is more than 900 customers/store/day (928 in 3Q22 and 822 in 4Q21), supported by sharply higher tourist numbers. We assume a mean ticket size of Bt82 (down 2% YoY, flat QoQ). Adding our 4Q22 CPALL profit estimate to the 9M22 numbers, our consolidated 2022 core earnings projection is Bt14,495m, up 55% YoY (Figure 1-2).