Equity Analysis /
Thailand

Central Pattana PCL: Set for a robust 3Q22 profit

  • 3Q22 earnings look set to be this year’s peak

  • 4Q22 profit could be soft; take-off expected in 1Q23

  • Multiple drivers of post-2022 growth

Bualuang Securities
28 October 2022

CPN should mark hefty 3Q22 earnings, supported by a reduced rent discount and good cost-control. Looking to 4Q22, heavy rains in Oct and heavy marketing spend may bring on QoQ profit squeeze, followed by robust YoY and QoQ growth for 1Q23.

3Q22 earnings look set to be this year’s peak

We estimate a 3Q22 core profit of Bt2,899m, up by 1957% YoY and 14% QoQ. Our core revenue assumption for core businesses is Bt9,022m, up by 93% YoY and 5% QoQ, with growth across most key units (except residential sales, where revenue may fall QoQ). Although mall traffic slipped QoQ, due to heavy rain, we still expect rental income of Bt7,967m, up by 90% YoY and 6% QoQ, led by solid tenant sales and a reduced rent discount (down to 12-13% in 3Q22 from 15% in 2Q22). We also assume YoY and QoQ revenue recoveries at food courts and hotels, as workers returned to offices and a new hotel opened in Nakhon Ratchasima in 3Q22. Also, good cost-control should have enabled YoY and QoQ expansion of GM and operating margin (details in Figure 1).