Equity Analysis /
Thailand

Central Retail Corp PCL: Reopening drives SSSG surge

  • SSSG to mark a strong recovery for 2Q22

  • Strong margin recovery, led by Fashion and rental income growth

  • Expect Hardline and Food to be the next drivers after reopening

Bualuang Securities
1 August 2022

We like CRC for its same-store sales and profit recovery stories tied to the reopenings of Thailand, Vietnam, and Europe, 2022-23. Looking to 2Q22, the relaxation or lifting of cross-border travel restrictions in Europe, Thailand, and Vietnam should enable the company to mark sharply higher SSSG and profit expansion. SSSG increased in July-to-date, so we expect swift earnings growth through the rest of the year. BUY!

SSSG to mark a strong recovery for 2Q22

Our channel check with the company pointed to 2Q22 being another strong quarter. We estimate a core profit of Bt1,351m, a YoY turnaround (a loss of 471m for 2Q21) and up 22% QoQ. Our 2Q22 SSSG assump-tion is 22%, led by the Fashion line with SSSG of 51%. Furthermore, the low base set by 2022 and Vietnam’s strong reopening set the scene for Food line SSSG of 17%. In contrast, Hardline had a high 2022 SSSG base, so we assume 2Q22 Hardline SSSG of just 2%. Our model points to swift rental income growth of 32% YoY and 9% QoQ, led by reduced rental discounts and higher revenue-sharing receipts from tenants.