THAILAND EQUITY RESEARCH 

 

Page | 1 | PHILLIP SECURITIES (THAILAND)  

Charoen Pokphand Foods  4QFY15 profit short of forecast  

THAILAND | SET | FOOD | COMPANY RESULTS BLOOMBERG CPF TB l REUTERS CPF.BK 

4QFY15 profit short of forecast at Bt1,548mn, up 92% y‐y but down 57% q‐q  CPF reported 4QFY15 net profit of Bt1,548mn, up 92% y‐y but down 57% q‐q. The quarterly profit lagged  our  forecast  as  a  result  of  low  season  effects  at  both  Thai  and  overseas  operations. Aquaculture business slipped back into the red while livestock business slowed down for the most part. Lower ASPs also dragged margin lower to 13.8% from 15% in 3QFY15 but the y‐y comparison however marked an improvement from 12.1% in 4QFY14. For the quarter, sales shed 1% y‐y and 2% q‐q to Bt109,576mn. SG&A expenses inched up 12% y‐y and 8% q‐q on higher marketing expenses to boost sales of ready meal products. Profits from affiliates edged up after CPF raised its stake in CPALL to 34.5% in this period from 32.15% in the prior quarter. The results in this period also included net exceptional gains of Bt1,605mn, comprising (i) a Bt1,130mn gain from partial divestment of CPALL, (ii) a Bt471mn gain from change in fair value of biological assets and a (iii) a FX gain of 4mn.  For the whole of FY15, net profit rose 5% y‐y to Bt11,059mn on ex‐items. Slowing economic growth pushed sales down 1% y‐y to Bt421,355mn as (i) sales from Thai livestock operations dropped 4% y‐y, (ii) sales from Thai aquaculture operations shrank 9% y‐y, (iii) sales from overseas livestock operations grew 3% y‐y and (iv) sales from overseas aquaculture operations sagged 7% y‐y. Despite a slowdown in Thai livestock business, the recovery of aquaculture business in Thai and overseas operations and a strong showing  from overseas  livestock business sent margin higher  to 13.8%  in  this period  from 13.4% a year earlier. SG&A expenses  inched up 9% y‐y on mounting marketing expenses to boost sales of ready meal products. The full‐year results also included net exceptional gains of Bt10,322mn, comprising (i) a Bt7,129mn gain from partial divestment of CPALL and TRUE, (ii) a Bt236mn gain from change in fair value of investments in affiliates, (iii) a FX gain of Bt1,348mn and (iv) a Bt404mn gain from change in fair value of biological assets.   Core profit poised for explosive growth in FY16 Following yesterday’s analyst meeting, we expect CPF’s core profit will return to explosive growth this  year  helped  by  (i)  a  retreat  in  global  raw material  prices,  (ii)  the  prospect  of  a  return  to profitability at aquaculture business driven by a rise in the number of farmers which would in turn drive sales of aquaculture feeds and breeds higher and (iii) the likely recovery in livestock business from outbreak  in China, which would push up ASPs  in China. For poultry business,  the outlook brightens helped by export markets thanks to its cooperation with ITOCHU which would allow CPF to further expand its market presence in Japan. Its overseas operations are also likely to fare better this year driven by the full‐year consolidation of the recently acquired poultry business in Russia. In Turkey, the outlook remains worrisome but CPF has attempted to downside its livestock business to limit losses. On this basis, we estimate its FY16 profit before ex‐items will come in at Bt3,372mn and net profit will clock in at Bt11,572mn, up 5% y‐y. In our forecast, we assume (i) sales will go up 9% y‐y to Bt460,652mn, (ii) margins will be similar to the  levels achieved  in FY15 and (iii) profits from affiliates will edge higher.   ‘BUY’ rating with an upwardly revised FY16 target price of Bt26.50/share We maintain a  ‘BUY’ call on CPF shares with an upwardly revised FY16 target price of Bt26.50/ share. The ‘BUY’ rating reflects our optimistic view towards its earnings recovery prospects driven by a number of positive factors and more upside from current trading levels.   

         

Ref. No.: CO2016_0193   

Closing Price(Bt) 19.40

Target Price(Bt) 26.50 (+40.63%)

COMPANY DATA

O/S Shares (mn) : 7,743    

Market Cap. (Btmn) :

Market Cap. (USDmn) :

52‐WK Hi/Lo (Bt) : 25.5/16.4

3M Average Daily T/O (mn) : 22.11

Par Value (Bt) : 1.00

MAJOR SHAREHOLDERS (%)

1. CP Group Co., Ltd. 25.0

2. Charoen Pokphand Holding Co., Ltd. 11.5

3. Thai NVDR Co., Ltd 5.8

PRICE PERFORMANCE (%)

1MTH 3MTH 1YR

ABS 4% ‐6% ‐13%

REL TO SET INDEX 0% ‐6% 2%

PRICE VS SET INDEX

Source: Bloomberg, PSR

KEY FINANCIALS

FYE Dec FY14 FY15 FY16E FY17E

Sales(Btmn) 426,039 421,355 460,652 505,836

Net Profit(Btmn) 10,562 11,059 11,572 12,340

EPS (Bt) 1.43 1.50 1.57 1.67

P/E (X) 13.6 13.0 12.4 11.6

BVPS (Bt) 21.18 22.44 23.08 23.89

P/B (X) 0.9 0.9 0.8 0.8

DPS (Bt) 0.75 0.75 0.78 0.84

Dividend Yield (%) 3.9 3.9 4.0 4.3

ROE  (%) 9.29 9.46 9.74 9.93

Debt/Equity (X) 2.15 2.75 2.48 2.44

Source: Company, PSR Est.

**Multiples and yields are based on latest closing price

VALUATION METHOD

PE'16 (16x)

Naree Apisawaittakan

Securities Investment Analyst # 17971

Tel: 66 2 635 1700 # 484

150,213                                           

4,214                                                 

28 August 2015

Buy (Maintain)

02 March 2016

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20

30

40

50

Mar‐13 Mar‐14 Mar‐15 Mar‐16

CPF  TB EQUITY SETI (rebased)

THAILAND EQUITY RESEARCH 

 

 

PHILLIP SECURITIESS (THAILAND) | 2 | P a g e   

Charoen Pokphand Foods COMPANY RESULTS

Income Statement

Btmn 4Q15 3Q15 4Q14 q‐q+/‐ y‐y+/‐ 2015 2014 y‐y+/‐

Sa le s  and  s e rvi ces 109,576 111,877 109,694 ‐2% 0% 421,355 426,039 ‐1%

Cos ts  of s a l e s   94,473 95,050 96,365 ‐1% ‐2% 363,287 368,760 ‐1%

Gross profit 15,103 16,828 13,328 ‐10% 13% 58,068 57,280 1%

Se l l i ng expenses 6,602 5,123 5,810 29% 14% 20,890 20,140 4%

Admini s tra ti ve  expenses 6,347 6,826 5,753 ‐7% 10% 25,999 22,671 15%

Operating profit  2,153 4,879 1,766 ‐56% 22% 11,179 14,468 ‐23%

Othe r i ncome 1,397 578 748 142% 87% 3,420 2,800 22%

Ga in/los s  from  a ffi l i a te s 1,486 1,238 1,025 20% 45% 5,221 4,869 7%

Othe r expense 0 0 0 n.m. n.m. 0 0 n.m.

EBIT 5,036 6,695 3,538 ‐25% 42% 19,820 22,137 ‐10%

Inte res t expense 2,238 2,837 2,422 ‐21% ‐8% 9,614 8,903 8%

EBT 2,798 3,858 1,116 ‐27% 151% 10,206 13,234 ‐23%

Taxa tion 1,069 1,216 464 ‐12% 130% 3,654 3,649 0%

EAT 1,729 2,642 652 ‐35% 165% 6,552 9,585 ‐32%

Minori ty ‐1,785 ‐1,367 ‐1,116 ‐31% ‐60% ‐5,315 ‐3,668 ‐45%

Net profit before extra ‐57 1,275 ‐464 ‐104% 88% 1,237 5,917 ‐79%

Extra ordina ry i tems 1,605 2,297 1,272 ‐30% 26% 9,822 4,644 111%

Net profit  1,548 3,571 808 ‐57% 92% 11,059 10,562 5%

EPS  (Bt) 0.21 0.48 0.11 ‐57% 92% 1.50 1.43 5%

n.m.

Key Financial Ratio

% 4Q15 3Q15 4Q14 q‐q+/‐ y‐y+/‐ 2015 2014 y‐y+/‐

Cos t of s a l e s /s a l e s   86.22% 84.96% 87.85% 1% ‐2% 86.22% 86.56% 0%

SG&A exp/s a le s   11.82% 10.68% 10.54% 11% 12% 11.13% 10.05% 11%

Gros s  margin 13.78% 15.04% 12.15% ‐8% 13% 13.78% 13.44% 3%

Opera ti ng profi t margin 1.97% 4.36% 1.61% ‐55% 22% 2.65% 3.40% ‐22%

Net profi t margin 1.41% 3.19% 0.74% ‐56% 92% 2.62% 2.48% 6%

Balance Sheet 

Btmn 4Q15 3Q15 4Q14 q‐q+/‐ y‐y+/‐ 2015 2014 y‐y+/‐

As s e ts 494,263 448,270 416,764 10% 19% 494,263 416,764 19%

Lia bi l i ti e s 320,538 275,105 252,798 17% 27% 320,538 252,798 27%

Pa id ‐up  (mn  s hrs ) ‐ Pa r Bt1 7,743 7,743 7,743 0% 0% 7,743 7,743 0%

Equi ti e s 173,725 173,165 163,966 0% 6% 173,725 163,966 6%

BVPS  (Bt) 22.44 22.36 21.18 0% 6% 22.44 21.18 6%

Debt/equi ty (x) 1.8 1.6 1.5 16% 20% 1.8 1.5 20%

THAILAND EQUITY RESEARCH 

 

 

PHILLIP SECURITIESS (THAILAND) | 3 | P a g e   

Corporate Governance ‐2015

ADVANC BAFS BCP BIGC BTS CK CPN DRT DTAC DTC

EASTW EGCO GRAMMY HANA HMPRO INTUCH IRPC IVL KBANK KCE

KKP KTB LHBANK LPN MCOT MINT MONO NKI PHOL PPS

PS PSL PTT PTTEP PTTGC  QTC RATCH ROBINS SAMART SAMTEL

SAT SC SCB SCC SE‐ED SIM SNC SPALI THCOM TISCO

TKT TMB TOP VGI WACOAL

AAV ACAP AGE AHC AKP AMATA ANAN AOT APCS ARIP

ASIMAR ASK ASP BANPU BAY BBL BDMS BECL BKI BLA

BMCL BOL BROOK BWG CENTEL CFRESH CHO CIMBT CM CNT

COL CPF CPI CSL DCC DELTA DEMCO ECF EE ERW

GBX GC GFPT GLOBAL GUNKUL HEMRAJ HOTPOT HYDRO ICC ICHI

INET IRC KSL KTC LANNA LH LOXLEY LRH MACO MBK

MC MEGA MFEC NBC NCH NINE NSI NTV OCC OGC

OISHI OTO PAP PDI PE PG PJW PM PPP PR

PRANDA PREB PT PTG Q‐CON QH RS S & J SABINA SAMCO

SCG SEAFCO SFP SIAM SINGER SIS SITHAI SMK SMPC SMT

SNP SPI SSF SSI SSSC SST STA STEC SVI SWC

SYMC SYNTEC TASCO TBSP TCAP TF TGCI THAI THANA THANI

THIP THRE THREL TICON TIP TIPCO TK TKS TMI TMILL

TMT TNDT TNITY TNL TOG TPC TPCORP TRC TRU TRUE

TSC TSTE TSTH TTA TTCL TTW TU TVD TVO TWFP

TWS UAC UT UV VNT WAVE WINNER YUASA ZMICO

2S AEC AEONTS AF AH AIRA AIT AJ AKR AMANAH

AMARIN AP APCO AQUA AS ASIA AUCT AYUD BA BEAUTY

BEC BFIT BH BIG BJC BJCHI BKD BTNC CBG CGD

CHG CHOW CI CITY CKP CNS CPALL CPL CSC CSP

CSS CTW DNA EARTH EASON ECL EFORL ESSO FE FIRE

FOCUS FORTH FPI FSMART FSS FVC GCAP GENCO GL GLAND

GLOW GOLD GYT HTC HTECH IEC IFEC IFS IHL IRCP

ITD JSP JTS JUBILE KASET KBS KCAR KGI KKC KTIS

KWC KYE L&E LALIN LHK LIT LIVE LST M MAJOR

MAKRO MATCH MATI MBKET M‐CHAI MFC MILL MJD MK MODERN

MOONG MPG MSC MTI MTLS NC NOK NUSA NWR NYT

OCEAN PACE PATO PB PCA PCSGH PDG PF PICO PL

PLANB PLAT PPM PRG PRIN PSTC PTL PYLON QLT RCI

RCL RICHY RML RPC S SALEE SAPPE SAWAD SCCC SCN

SCP SEAOIL SIRI SKR SMG SOLAR SORKON SPA SPC SPCG

SPPT SPVI SRICHA SSC STANLY STPI SUC SUSCO SUTHA SYNEX

TAE TAKUNI TCC TCCC TCJ TEAM TFD TFI TIC TIW

TLUXE TMC TMD TOPP TPCH TPIPL TRT TSE TSR UMI

UP UPF UPOIC UREKA UWC VIBHA VIH VPO WHA WIN

XO

Score Range

< 50%

50‐59%

60‐69%

70‐79%

80‐89%

90‐100%

The disclosure of the survey result of the Thai  Institute of Directors  Association (IOD) 

regarding corporate governance is  made pursuant to the Office of the Securities  and 

Exchange Commission. The survey of the IOD is  based on the information of a  company 

l isted on the Stock Exchange of Thailand and the Market for Alternative disclosure to the 

public and able to be accessed by a  general  public investor. The results, therefore, is  from 

the perspective of a  third party. It is  not an evaluation of operation and is  not based on 

inside information.

The survey result is  as  of the date appearing in the Corporate Governance Report of Thai  

Listed Companies. As  a  result, the survey result may be changed after that data. Phil l ip 

Securities  (Thailand) of securities  company does  not confirm nor certify the accuracy of 

such survey result.

No logo given

Number of Logo

Results Presentation

THAILAND EQUITY RESEARCH 

 

 

PHILLIP SECURITIESS (THAILAND) | 4 | P a g e   

Anti‐corruption indicators

Level 5 (Extended)

BCP CPN GYT PE PM PPP PT PTT PTTGC SAT scc

THANI TOP

Level 4 (Certified) 

DCC DTC DRT EASTW ECL EGCO ERW FSS GCAP HANA HTC

INTUCH IRPC IVL KBANK KCE KGI KKP KTB LANNA LHBANK MTI

NKI PSL PTG PTTEP SABINA SCB SNC SNP SSF SSSC TCAP

THCOM TISCO TMB TMD TNITY TOG

Level 3 (Established) 

Level 3A: Declaration to join CAC, etc

ABC ACAP ADVANC AGE AH AMANAH ANAN AP APCS APURE AS

ASIA ASIAN ASIMAR BIGC BROOK BTS BWG CEN CENTEL CFRESH CHARAN

CHO CHOTI CM CNT COL CPF CPI CPL DELTA DEMCO DIMET

DNA DTAC EA ECF EE EVER FPI GBX GC GFPT GLOW

HMPRO HOTPOT ICC ICHI IFEC INOX INSURE IRC JAS JTS JUBILE

KC KTC KYE LHK LPN LRH MAKRO MC MCOT MFC MFEC

MINT MJD MONO MOONG NBC MSC NDR NINE NMG NSI NTV

OGC PACE PCSGH PDI PG PHOL PLAT PPS PR PRANDA PREB

PS QLT RATCH RML ROBINS ROJNA RWI SAMCO SCCC SCG SEAOIL

SE‐ED SENA SINGER SITHAI SMK SMPC SPALI SPC SPCG SPI SRICHA

SSI STANLY SUPER SVI SYMC SYNEX SYNTEC TASCO TCMC TFI THAI

THRE THREL TICON TKT TLUXE TMILL TMT TNL TPCORP TSTE TSTH

TTCL TU TVI UOBKH UREKA VGI VNT WACOAL WHA ZMICO

Level 3B: Organization's statement but no declaration to join CAC, etc

AAV AHC AIT AKR ARROW ASK BA BDMS BEC BJCHI BUI

CGH CHG CHOW CIG CITY CK CKP COLOR CWT EARTH EASON

EPG F&D FANCY FIRE FMT FORTH GENCO GL GOLD GPSC GRAMMY

HYDRO IRCP IT JCT KCM KWC LH LIT LOXLEY MACO MANRIN

MATI MODERN MSC NOBLE NOK NPK NUSA OISHI OTO PAF PAP

PATO PF PJW PLANB PLE POLAR PRG PTL Q‐CON QTC RCI

S11 SALEE SAM SAMART SAMTEL SAPPE SC SCP SFP SIM SLP

SMT SPA SPORT SSC SST STEC STPI SUC SUTHA SVI T

TBSP TAE TCC TFD TGCI TGPRO THANA THIP TIW TK TMW

TNDT TOPP TPC TPCH TPIPL TSR TT TYCN UAC UBIS UEC

UMI UP UPF UT UV VPO WAVE WINNER YUASA

Level 2 (Declared)

2S ABICO AF AKP AMARIN AMATA AOT APCO AYUD BEAUTY BFIT

BH BKD BLAND BTNC CCP CI CSR CSS EFORL EPCO FE

FNS FVC GEL GLOBAL HEMRAJ IEC IFS INET JUTHA KASET KCAR

KKC KSL L&E LALIN LTX M MALEE MBK MBKET MEGA MK

MPG MTLS NCH NCL NPP OCC OCEAN PB PCA PRINC QH

ROCK RPC S & J SGP SIAM SIS SKR SMG SMIT SORKON SUSCO

TAKUNI TEAM TF TIC TIP TIPCO TMC TMI TPP TRT TRU

TRUE TSC TSI TTW TVD TVO UKEM UNIQ UWC VNG WIIK

WIN XO

Level 1 (Committed)

ACD AEONTS AFC AIRA AJ ALUCON AMC AQUA ARIP AUCT BAT‐3K

BIG BJC BOL BRR BSBM CBG CCET CCN CGD CMR CPH

CSC CSP CTW DCON DRACO DSGT DTCI E EMC ESSO FOCUS

FSMART GIFT GLAND GRAND GUNKUL HFT HTECH ILINK ITD JSP IHL

KDH KTIS KTP LEE LST MAJOR MAX M‐CHAI MDX MIDA MATCH

ML MPIC NC NEP NNCL OHTL PICO PK PL PPM NWR

PRAKIT PRECHA PRIN PSTC RAM RICH RS SANKO SAUCE SAWAD PYLON

SAWANG SCN SEAFCO SHANG SIRI SMART SMM SOLAR SPACK SPG SF

SPPT SPVI STAR SVH SVOA SWC TAPAC TC TCCC TCJ STA

TCOAT TKS TNH TNPC TPA TPAC TPOLY TRC TRUBB TSE TTA

TTI TTL TTTM TWP TWZ U UMS UPA UPOIC UVAN UTP

VARO VI VIBHA VIH VTE WG

Data not available/No policy

A ACC AJD AQ BCH BGT BROCK BSM BTC CHUO CRANE

CPR EIC FER JMART JMT KAMART KBS KIAT LDC MCS METCO

MBAX NEW NEWS NYT PAE PDG PERM PMTA RCL RICHY ROH

POST S SIMAT TCB TR TSF TVT

THAILAND EQUITY RESEARCH 

 

 

PHILLIP SECURITIESS (THAILAND) | 5 | P a g e   

Anti‐corruption indicators

Level 5 : Extended

Anti‐corruption policies extend to business partners, dealers, and distributors.

Level 4 : Certified

Anti‐corruption policies can be engaged by audit committee and auditors approved by the SEC.

Anti‐corruption policies are certified by CAC and independent assurance providers.

Level 3 : Established

Anti‐corruption corruption policies cover anti‐bribery, and communications and educating all employees anti‐corruption policies.

 

Level 3A  Public out statement to join CAC, etc.

Level 3B Declare statement and organization’s anti‐corruption policies but no intention to join CAC, etc.

Level 2 : Declared

Declare statement to participate CAC against corruption.

Level 1 : Committed

Organization and Board of Directors’ statements against corruption and not getting involve in any malpractices.

Assessment

Anti‐corruption progress indicator for listed companies is a part of SEC’s commitment to create sustainability in anti‐corruption and to become a role model to any 

related business. The progress indicators comprise of five levels: 1) Committed, 2) Declared, 3) Established, 4) Certified, and 5) Extended. These indicators will 

encourage listed firms to formulate anti‐corruption policies to opt out of corruption, and investors can determine their investment based on anti‐corruption indicator 

or avoid investment in listed firms that could get involve in corruption.

THAILAND EQUITY RESEARCH 

 

 

PHILLIP SECURITIESS (THAILAND) | 6 | P a g e   

Industry Group Name Sector Name Sector Index

Agro & Food Industry[AGRO]  Agribusiness AGRI

Food & Beverage FOOD

Consumer Products[CONSUMP] Fashion FASHION

Home & Office Products HOME

Personal  Products  & Pharmaceuticals PERSON

Financials  [FINCIAL] Banking BANK

Finance & Securities FIN

Insurance INSUR

Industrials  [INDUS] Automotive AUTO

Industrial  Materials  & Machinery IMM

Packaging PKG

Paper & Printing Materials PAPER

Petrochemicals  & Chemicals PETRO

Steel STEEL

Property & Construction[PROPCON] Construction Materials CONMAT

Construction Services CONS 

Property Development PROP

Property Fund & REITs PF&REIT 

Resources  [RESOURC] Energy & Util ities ENERG

Mining MINE

Services  [SERVICE] Commerce COMM

Media  & Publishing MEDIA

Health Care Services HELTH

Tourism & Leisure TOURISM

Professional  Services PROF

Transportation & Logistics TRANS

Technology [TECH] Electronic Components ETRON

Information & Communication Technology ICT

PSR Rating SystemCapital Gain Recommendation

> 15% BUY

> 5% ‐ 15% ACCUMULATE / TRADING BUY

> 0% ‐ 5% NEUTRAL

0 <= SELL

Remarks

We do not base our recommendations  entirely on the  above quantitative return bands.  We consider qualitative factors  l ike (but 

not l imited to) a  stock's  risk reward profi le, market sentiment, recent rate of share price appreciation, presence or absence of 

stock price catalysts, and speculative undertones  surrounding the stock, before making our final  recommendation 

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