Equity Analysis /

GFPT PCL: Higher 1Q22 earnings expectations

  • Insights into 1Q22—a robust YoY and QoQ profit jump

  • Robust earnings momentum to continue through 2Q22 and 2H22

  • 2022 earnings upgrade due to the expanded sales and GM

Bualuang Securities
21 April 2022

GFPT remains our 2022 sectoral pick in the Agro-Food space. We expect its quarterly earnings to resume a robust YoY rise starting in 1Q22 and through 4Q22, underpinned by bigger export volume, higher export and domestic byproduct prices and a jump in GM (which will outweigh the effect of the hike in raw material costs) and a GFN turnaround. Its valuation remains cheap—2022 PER of 13.9x against its up-cycle PER of 20x in Sep 2017 and Nov 2014.

Insights into 1Q22—a robust YoY and QoQ profit jump

We model a Bt255m net profit for 1Q22, up a robust 320% YoY and 370% QoQ. Excluding FX and derivative items, we estimate a Bt256m core profit for 1Q22, up 536% YoY and 1,730% QoQ. These new 1Q22 earnings forecasts are higher than our earlier Bt160m net profit and Bt150m core profit estimate thanks to bigger chicken export volume and higher chicken export prices along with domestic byproduct prices than modeled. This proves that the 3Q21 core loss was the nadir, followed by a slight core profit in 4Q21 and its big core profit jump in 1Q22.