Equity Analysis /

GFPT PCL: Stronger momentum of byproduct prices to-date

  • Weaker live chicken price but higher chicken byproduct price

  • Sustained high day-old chick prices reflect the breeder shortage

  • Upside from the full capacity utilization and lower freight cost

Bualuang Securities
13 December 2022

Despite the recent weakening of live chicken prices, a byproduct price recovery has gained pace to the benefit of GFPT, a major byproduct seller. The sustained high day-old chick price reflects the persisting breeder shortage. Its valuation is now cheap.

Weaker live chicken price but higher chicken byproduct price

Although the Bangkok live chicken price has slipped by 6% in Dec from Bt43.5/kg (Oct 25-Nov 20) to Bt41/kg (Dec 8 to now) due to two intervals of three-day long weekends (leading to weaker meat demand in the capital) provincial prices have held up firmly at Bt45-46/kg—Bt45/kg (Dec 6 to now) in Nakhon Pathom province and Bt46/kg (Sep 5 to now) in Chon Buri province. Interestingly, chicken byproduct prices have risen further from their recent low in Oct 2022 (in contrast with the weaker live chicken price in Oct-Dec), which is possibly related to increased spending optimization, leading to a demand switch from main chicken parts to chicken byproducts. We have seen chicken bone prices rise since mid-Oct—from their recent low of Bt19/kg (Oct 10-24) to Bt25/kg (Dec 8-12). Moreover, chicken feet prices have climbed up since Sep—from their recent low of Bt66.5/kg (Sep 12-Oct 24) to Bt72.50/kg (Dec 8-12).