Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>4Q24 and 2024 core profit grew by 333% and 237% YoY, respectively.</li><li>The resulted exceeded expectations due to a better- than-expected margin improvement, driven by higher swine prices and lower raw material costs.</li><li>The 1Q25E expects profit is expected to increase YoY and QoQ.</li></ul>

4Q24 and 2024 core profit grew by 333% and 237% YoY, respectively.The resulted exceeded expectations due to a better- than-expected margin improvement, driven by higher swine prices and lower raw material costs.The 1Q25E expects profit is expected to increase YoY and QoQ.

Charoen Pokphand Foods - Upbeat 4Q24 and 2024 Core Profit; 1Q25E to Grow Further

<ul><li>4Q24E and 2024E core profit is expected to have grown by 251% and 220% YoY, respectively, driven by higher profit margins (due to rising swine prices and lower raw material costs), a decline in operating expenses to sales, and increased profit contributions from affiliates, despite a drop in sales.</li><li>The current valuation has been upgraded to a buy based on the fundamentals (previously undervalued), but the long-term growth outlook has been downgraded to neutral (previously strong), with net profit growth over the next two years expected at a CAGR of 8%.</li><li>From a tactical perspective, the outlook has also shifted to neutral (previously limited downside risk).</li></ul>

4Q24E and 2024E core profit is expected to have grown by 251% and 220% YoY, respectively, driven by higher profit margins (due to rising swine prices and lower raw material costs), a decline in operating expenses to sales, and increased profit contributions from affiliates, despite a drop in sales.The current valuation has been upgraded to a buy based on the fundamentals (previously undervalued), but the long-term growth outlook has been downgraded to neutral (previously strong), with net profit growth over the next two years expected at a CAGR of 8%.From a tactical perspective, the outlook has also shifted to neutral (previously limited downside risk).

Charoen Pokphand Foods - 4Q24E and 2024E Core Profit Growth of 251% and 220% YoY

<ul><li>KTX maintains an Outperform rating for CPF, with a fair value of Bt26.53, based on the earnings yield approach with a required return of 8.9%, reflecting the target PER of 11x.</li><li>The valuation metrics still show that the stock remains attractive given the current fundamentals, with the stock price still below its fair value.</li><li>The tactical view has been upgraded to limited downside risk (previously neutral).</li></ul>

KTX maintains an Outperform rating for CPF, with a fair value of Bt26.53, based on the earnings yield approach with a required return of 8.9%, reflecting the target PER of 11x.The valuation metrics still show that the stock remains attractive given the current fundamentals, with the stock price still below its fair value.The tactical view has been upgraded to limited downside risk (previously neutral).

Charoen Pokphand Foods - 3Q24 Core Profit Growth of 275% YoY and 17% QoQ, Beat Forecast by 7%

Charoen Pokphand Foods  / Equity Bottom-Up

<ul><li>KTX has upgraded our recommendation to Outperform (previously Neutral) as the valuation metrics indicate a more bullish outlook based on the current fundamentals, with the stock price now seen as undervalued (compared to the previous neutral stance).</li><li>The tactical view is also upgraded to neutral (compared to the previous limited upside risk).</li><li>Meanwhile, we maintain a strong outlook on the company’s long-term growth prospects, anticipating core profit growth at a 14% CAGR from 2024E to 2026E.</li></ul>

KTX has upgraded our recommendation to Outperform (previously Neutral) as the valuation metrics indicate a more bullish outlook based on the current fundamentals, with the stock price now seen as undervalued (compared to the previous neutral stance).The tactical view is also upgraded to neutral (compared to the previous limited upside risk).Meanwhile, we maintain a strong outlook on the company’s long-term growth prospects, anticipating core profit growth at a 14% CAGR from 2024E to 2026E.

Charoen Pokphand Foods - Solid 3Q24E Earnings Growth; Raised 2024-26E Earnings Forecasts

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shandong-fengxiang-co-ltd-h" target="_blank" data-smartkarma-citation="entities:29164:1" rel="noopener">Shandong Fengxiang (9977 HK)</a> entered a trading halt “<em>pending the release of an announcement pursuant to the Code on Takeovers and Mergers.</em>” PAG, the controlling shareholder, likely aims to privatise Fengxiang. </li>
<li>The offer will likely be structured as a privatisation by merger by absorption requiring approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection). </li>
<li>The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close) could win over these shareholders' backing.</li>
</ul>



Shandong Fengxiang (9977 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.” PAG, the controlling shareholder, likely aims to privatise Fengxiang. 
The offer will likely be structured as a privatisation by merger by absorption requiring approval by at least 75% of independent H Shareholders (&lt;10% of all independent H Shareholders rejection). 
The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close) could win over these shareholders' backing.


Fengxiang (9977 HK): Privatisation by PAG?

Thailand

Charoen Pokphand Foods Public Company Limited produces a wide range of food products. The Company's products include chicken, pork, shrimp, fish, eggs. and duck.

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CP FOODS (CPF TB)

Charoen Pokphand Foods - Upbeat 4Q24 and 2024 Core Profit; 1Q25E to Grow Further

The resulted exceeded expectations due to a better- than-expected margin improvement, driven by higher swine prices and lower raw material costs.

Krungthai XSpring

Charoen Pokphand Foods - 4Q24E and 2024E Core Profit Growth of 251% and 220% YoY

We maintain an Outperform rating with a fair value of Bt25.36, based on the earnings yield method using a required return of 9.2%, reflecting a...

Krungthai XSpring

Charoen Pokphand Foods - 3Q24 Core Profit Growth of 275% YoY and 17% QoQ, Beat Forecast by 7%

KTX maintains an Outperform rating for CPF, with a fair value of Bt26.53, based on the earnings yield approach with a required return of 8.9%,...

Krungthai XSpring

Charoen Pokphand Foods - Solid 3Q24E Earnings Growth; Raised 2024-26E Earnings Forecasts

Our new fair value estimate is Bt26.53 (up from Bt22.25), based on the earnings yield method with a required return of 8.9%, which reflects a...

Krungthai XSpring

Fengxiang (9977 HK): Privatisation by PAG?

The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close)...

Arun George

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