Company Coverage
Charoen Pokphand Foods (CPF TB): 3Q26: Earnings Beat On Higher Share Of Profit From China Swine Business Restructuring
BUY (Maintained)
Current price:
Target price:
Upside:
Bt20.20
Bt25.00
23.76%
Analyst
Highlights
- CPF reported 3Q26 net profit of Bt5.2b (+0.8% yoy, +28.2% qoq), significantly exceeding our estimate, mainly driven by higher-than-expected share of profit from the restructuring of its swine business in China.
- We remain positive on its 2027 earnings outlook on the back of: a) an upward livestock price cycle in Thailand and Vietnam, and b) lower losses from its China swine operations following the disposal of underperforming farms.
- Maintain BUY with a target price of Bt25.00
Analysis
- Earnings beat on higher share of profit. Charoen Pokphand Foods (CPF) reported 3Q26 net profit of Bt5.2b (+0.8% yoy, +28.2% qoq). Excluding one-off items (forex gains of Bt179m, biological assets losses of Bt54m, and impairment losses on investments of Bt1.7b), 3Q26 core profit came in at Bt6.8b (+12.2% yoy, +49.7% qoq). However, our core profit calculation excludes the one-off gain from the restructuring of its swine business in China following the disposal of underperforming farms. As the company has not disclosed the transaction value, we estimate a one-time gain of Bt6.0b-6.5b from the transaction. As a result, core profit may come in below both our and market expectations.
- 3Q26 gross profit margin down yoy and qoq. Gross profit margin in 3Q26 came in at 13.4%, down from 16.5% in 3Q25 and 15.0% in 2Q26, mainly due to lower margins in the Thai and overseas livestock and aquaculture businesses. SG&A-to-sales increased to 8.9% in 3Q26, from 8.4% in 3Q25 and 8.5% in 2Q26, driven by higher salary expenses.
Highlights
- CPF reported 3Q26 net profit of Bt5.2b (+0.8% yoy, +28.2% qoq), significantly exceeding our estimate, mainly driven by higher-than-expected share of profit from the restructuring of its swine business in China.
- We remain positive on its 2027 earnings outlook on the back of: a) an upward livestock price cycle in Thailand and Vietnam, and b) lower losses from its China swine operations following the disposal of underperforming farms.
- Maintain BUY with a target price of Bt25.00
Analysis
- Earnings beat on higher share of profit. Charoen Pokphand Foods (CPF) reported 3Q26 net profit of Bt5.2b (+0.8% yoy, +28.2% qoq). Excluding one-off items (forex gains of Bt179m, biological assets losses of Bt54m, and impairment losses on investments of Bt1.7b), 3Q26 core profit came in at Bt6.8b (+12.2% yoy, +49.7% qoq). However, our core profit calculation excludes the one-off gain from the restructuring of its swine business in China following the disposal of underperforming farms. As the company has not disclosed the transaction value, we estimate a one-time gain of Bt6.0b-6.5b from the transaction. As a result, core profit may come in below both our and market expectations.
- 3Q26 gross profit margin down yoy and qoq. Gross profit margin in 3Q26 came in at 13.4%, down from 16.5% in 3Q25 and 15.0% in 2Q26, mainly due to lower margins in the Thai and overseas livestock and aquaculture businesses. SG&A-to-sales increased to 8.9% in 3Q26, from 8.4% in 3Q25 and 8.5% in 2Q26, driven by higher salary expenses.
BUY (Maintained)
Current price:
Target price:
Upside:
Bt20.20
Bt25.00
23.76%
Analyst
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