Equity Analysis /
Thailand

Central Retail Corp PCL: Sharp YoY shift up for 3Q22 profit

  • Very strong YoY profit for 3Q22 compared with 3Q21

  • Expect 4Q22 to be the peak quarter

  • Reopening, Food, and Hardline to drive 2023 profit

Bualuang Securities
1 November 2022

CRC should post robust 3Q22 earnings from a low 3Q21 base. We expect further recoveries in revenues and margins across all businesses. Looking to 4Q22, seasonality, Central’s 75th anniversary, and the release of pent-up demand will make it the 2022 peak.

Very strong YoY profit for 3Q22 compared with 3Q21

We estimate 3Q22 core earnings of Bt1,197m, a turnaround from the loss of Bt2,241m marked for 3Q21 but down 35% QoQ (seasonality and heavier SG&A expenses, see Figure 1). Led by its Thailand Fashion line, we expect CRC to mark SSSG of 45%. Fashion, hardline and Food should report 3Q22 SSSG of 81%, 28%, and 22%, respectively. In addition to the low 3Q21 base, improved traffic to malls and better product prices would have supported SSSG and GM. We also expect CRC to report rental income of Bt1,650m, up by 83% YoY and 3% QoQ, due to a reduced rent discount. However, new store openings will have pushed up utilities costs and marketing spend, so we assume that 3Q22 SG&A expenses rose by 17% YoY and 8% QoQ.