Equity Analysis /
Thailand

CP All: Buying into a reopening catch-up play and market share gainer

  • CPALL continues to build market share

  • Still expect strong profit growth for 2022 onward

  • New investments and projects to fuel growth over long haul

Bualuang Securities
15 September 2022

Despite our earnings forecast cuts (largely tied to MAKRO), we reiterate a BUY call on CPALL with a revised YE22 DCF-target price of Bt75 (down from Bt79 previously). As a beneficiary of reopening and a market share gainer, we believe the stock presents a good risk/reward proposition.

CPALL continues to build market share

Standalone 7-Eleven SSSG has been swift during the past few quarters, indicating that it is building market share (Figure 1-2). As a prime beneficiary of Thailand and its positioning as a convenience food store, 7-Eleven’s numbers have improved in tandem with normalizing consumer behavior (workers back to offices, children to school, and more outdoor activity) and sharply higher foreign tourist arrivals (Figure 3). Building market share during the current period of rising consumer inflation prompted the firm to offer more value-priced products (value meals and big packs) that may squeeze GM, but we observed a fatter EBIT margin and solid YoY profit growth for recent quarters (Figure 4).