Equity Analysis /
Thailand

Thailand: Commerce - Revenue and GM recoveries driving Retail stocks

  • Strong SSSG in 3Q22

  • Price increases and traffic recoveries boosted margins

  • Sales and GM expansion to remain key drivers for 4Q22 and 2023

Bualuang Securities
24 November 2022

Most retailers posted strong 3Q22 performances from low 3Q21 bases, supported by the tourism recovery. Looking ahead, despite cost headwinds, we expect improved traffic and repricing to enable further growth.

Strong SSSG in 3Q22

The mean 3Q22 SSSG of our Retail coverage was 14% (Figure 1), led by Discretionary space, where average SSSG was 28%. CRC marked the fastest SSSG of 44%, followed by COM7 at 20%, and HMPRO at 17%. CPN posted a 68% YoY recovery in implied rental rate, as its mean rental discount declined from 56% in 3Q21 to 11% in 3Q22. Average Grocery space SSSG was 8%, led by CPALL at 22%; makro marked SSSG of 9%, BIGC’s same-store sales declined 2%, while Lotus’s’ SSS was flat. In Home Construction space, sharply lower steel product prices and business disruption tied to heavy rains and flooding made for slow SSSG.