Equity Analysis /
Thailand

GFPT PCL: Net beneficiary of the prolonged Russia-Ukraine war

  • Robust jump in chicken export volume expected in 2022

  • Windfall from increased exports to Europe during the Ukraine war

  • Sustained high domestic byproduct prices through 3Q22

Prasit Sujiravorakul
Prasit Sujiravorakul

Equity Research Analyst

Bualuang Securities
24 May 2022

GFPT stands to be a net gainer from its improved export volume to Europe in 2022 as a result of the prolonged Russia-Ukraine war. Its quarterly earnings will deliver a robust YoY jump through 4Q22, underpinned by the leap in export volume, further rises in domestic byproduct and export prices and GFN’s turnaround. It remains our 2022 sectoral top pick, led by its 2022 profit jump and a cheap valuation—2022 PER of 13.7x vs its up-cycle PER of 20x.

Robust jump in chicken export volume expected in 2022

We estimate that GFPT’s export volume will be 34k tonnes (which is higher than our previous 30k-tonne target) in 2022, up 45% YoY, driven by: 1) the resumed capacity utilization of its five cooked-chicken lines which currently run at 80% (2k tonnes/mth from the full 2.5k tonnes/mth capacity), 2) enhanced demand after more countries reopened in Europe since 2H21 through 2022, the increased reopening in Japan and China in 2H22 (especially the reopening of some provinces in China in 2H22 after the zero COVID-19 policy was successful in 1H22) and 3) the prolonged Russia-Ukraine war which has prompted Europe to import more chicken from countries including Brazil and Thailand.