Equity Analysis /

Thailand: Agro & Food - Our 2023 first-tier pick switched to CPF

  • Rebound of Chinese and Vietnamese pork prices in 2023

  • Bottom-line turnaround for CTI and CPP in 2023

  • High Thai livestock breeder prices reflects breeder stock shortage

Bualuang Securities
21 December 2022

We predict that the anticipated bounce of Chinese and Vietnamese pork prices in 2023 will present scope for an upside to CPF’s 2023 earnings. We have therefore switched our first-tier pick in the Agro-Food space from GFPT to CPF. The valuations of all livestock plays are currently cheaper than their long-term means.

Rebound of Chinese and Vietnamese pork prices in 2023

Despite some relaxing of its zero-COVID policy in Dec, the Chinese pork price has been on the decline as Chinese people continue to have concerns over the widening COVID-19 spread and higher numbers of infections. We think that this is a short-term negative because the anticipated lifting of COVID-19 restrictions and measures will boost the Chinese tourism sector in 2023. Meanwhile, the recent decline in Vietnam’s live pig price has been due to the resurgence of an African Swine Fever (ASF) outbreak during Nov-Dec, prompting supply dumping by small-scale pork operators. However, the full-year impact of reopening for the tourism sector will bolster pork prices in Vietnam in 2023.