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).