Equity Analysis /

Thailand: Thai Retailers - Sector recovery on-track

  • SSSG accelerated in 2Q22

  • Cost-push factors dampened 2Q22 profit growth

  • Profit recoveries should be sustained through 2H22

Bualuang Securities
24 August 2022

Retailers marked SSSG and YoY profit growth for 2Q22, supported by reopening. Looking forward, although cost-push pressures remain a concern, we still expect reopening effects and the low 2H21 base to make for strong 2H22 earnings growth. While we still have BUY calls on CPN and CRC, HMPRO and CPALL are now in the spotlight as catch-up plays for their decent 3Q22 outlooks.

SSSG accelerated in 2Q22

Most retailers posted faster SSSG for 2Q22 (Figure 1). Discretionary plays (CRC, CPN, and HMPRO) marked outstanding SSSG averaging 13% for 2Q22 (versus 4% in 1Q22). Led by CPALL, Grocery Retail (CPALL and MAKRO) posted mean SSSG of 6.5% for the quarter (4.5% in 1Q21). Home Construction Retail (DOHOME and GLOBAL) saw average SSSG of 6%—much slower than the 16% marked for 1Q22, due to high sales in 2Q21 (the outlets of both firms were allowed to stay open during the hard lockdown) and lower QoQ steel prices in 2Q22.