Equity Analysis /
Thailand

Central Retail Corp PCL: Rebuilding strength

  • Strong 1H22 recovery, led by the Fashion and Food lines

  • Malls in Thailand and Vietnam are recovering

  • New store formats to sustain growth in post-COVID era

Bualuang Securities
19 August 2022

CRC’s robust 1H22 earnings rebound and our expectation of an ongoing recovery through 2H22 and into 2023 makes the stock a top reopening play, we believe. And because 1H22 results beat our expectations, we have upsized our 2022-24 profit forecasts and DCF-derived target price (from Bt44 to Bt47). BUY!

Strong 1H22 recovery, led by the Fashion and Food lines

We expect the robust 1H22 recoveries in the Fashion and Food lines to continue, fueling 2022-23 growth (Figure 1-2). Rinascente marked 2Q22 sales equal to more than 90% of its 2Q19 number and Thai department stores saw a recovery for the quarter equal to more than 80% of its 2Q19 number. Furthermore, CRC reported that it had built its market share to about 37% in June (from around 30% in 2021). Given the low 3Q21 base (a hard lockdown in Thailand for most of 3Q22) and much higher foreign tourist arrivals through 2H22, we expect a sustained earnings recovery through the remainder of this year and into 2023.