Our TRADING BUY stands. The full reopening will boost meat demand and the chicken price in 2022. Its 3Q21 and 2021 earnings were the nadir before a bounce expected in 2022. We recommend accumulating the stock on its share price weakness ahead of 2022 earnings bounce.
Missed our estimates by a mile
GFPT posted a net loss for 3Q21 of Bt87m, a reversal from net profits of Bt342m in 3Q20 and Bt182m in 2Q21. Excluding extra items in 3Q21—Bt24m in FX gain, Bt61m loss from derivative hedging and Bt35m gain from the sale of trucks—core loss was Bt85m, a reversal from core profits of Bt315m in 3Q20 and Bt175m in 2Q21. The bottom-line missed our previous expectation of Bt5m net profit while the core loss was significantly deeper than our Bt4m core loss estimate, thanks to lower GM, higher SG&A expense (higher freight costs), deeper GFN loss and lower McKey profit than modeled. GM was at an all-time low of 5.4%, which was lower than our 7.5% estimate and 15.7% in 3Q20 and 10.2% in 2Q21. McKey’s net profit undershot our model by 17% while GFN’s net loss was 60% deeper than our model.