Earnings Report /
Thailand

Charoen Pokphand Foods: Missed estimates big time; shallower core loss expected in 4Q21

  • Reversal into 3Q21 core loss; missed our model significantly

  • CPF posted a 3Q21 net loss of Bt5.37bn

  • We model a Bt484m core loss for 4Q21

Prasit Sujiravorakul
Prasit Sujiravorakul

Equity Research Analyst

Bualuang Securities
15 November 2021

Despite the 2021 earnings cut, we reiterate our TRADING BUY call on CPF. The full reopening will boost pork and chicken prices in 2022. Its 3Q21 looks set to be the nadir before a bounce expected in 2022.

Reversal into 3Q21 core loss; missed our model significantly

CPF posted a 3Q21 net loss of Bt5.37bn, a reversal from net profits of Bt7.47bn in 3Q20 and Bt4.74bn in 2Q21. Excluding three extra items in 3Q21—Bt163m FX gain, Bt2.02bn loss from biological assets and Bt1.18m after-tax gain from trading CPALL shares—it posted a Bt4.69bn core loss, a reversal from core profits of Bt7.2bn in 3Q20 and Bt3.82bn in 2Q21. The bottom-line missed our Bt1.85bn net profit estimate while the core loss number was below our Bt1.15bn core profit forecast due to lower GM, higher SG&A (freight rates) than modeled and a reversal into equity loss (against our equity profit forecast). GM of 8.8% missed our 14% estimate (19.1% in 3Q20 and 16.4% in 2Q21).