Equity Analysis /

CP All: Thailand’s CVS superstar!

  • Low base, price hikes, and reopening support 2022 outlook

  • CPALL poised to build further market share

  • Re-initiate coverage with a BUY call to a target price of Bt79

Bualuang Securities
17 March 2022

We have re-initiated coverage on CPALL with a BUY call to a DCF-derived YE22 target price of Bt79. We like CPALL for its dominant position in the CVS format, huge branch network, and superior merchandising and logistics. It looks set to build further market share, supported by online sales. We forecast core profit growth of 57% for 2022, driven by SSSG (and supported by new stores).

Low base, price hikes, and reopening support 2022 outlook

Our channel check with CPALL confirmed our view that a solid 2022 recovery is in progress. Despite the Omicron variant, its 7-Eleven store network marked high single-digit SSSG for the year-to-date, following weak COVID-poisoned numbers for 2020 and 2021 (including disruptions caused by breakouts at distribution centers). In 2020-21, lockdowns and curfews squeezed traffic from 1.2k persons/store/day to 800-900 persons/ store/day. The operation will improve substantially this year (we do not anticipate any further lockdowns or other major COVID-related restric-tions).