CP Axtra PCL (CPAXT.BK): Recovery Delayed by Consumption Shift; Downgrade to Sell, lower TP to Bt13.10

Research evidence excerpt

CP Axtra PCL (CPAXT.BK): Recovery Delayed by Consumption Shift; Downgrade to Sell, lower TP to Bt13.10

CP Axtra PCL (CPAXT.BK)

08 July 2026 Citi Research

earnings contribution from these investments to materialize only from 2027–2028 onwards. The first Philippine store is likely

to open by late 2026 or early 2027, while we view that consumption recovery could remain subdued following the recent

inflation-driven pressure on purchasing power. Although we are more constructive on Malaysia’s consumer outlook, the

acquisition is expected to be completed only in 4Q26, delaying financial benefits. (Related Note: ASEAN Consumer – Quality

wins amid structurally weak consumer cycle )

Earnings Revision on weaker outlook — We cut our 2026E–2028E earnings forecasts by -8%/-15%/-10%, respectively to

reflect weaker sales growth as government consumption programs shift spending toward traditional trade channels, coupled

with structurally weak non-food demand in the hypermarket segment. We also expect limited SG&A efficiency gains amid rising

short-term logistics costs. Our revised earnings estimates are 8%/3% below and 4% above Bloomberg consensus for 2026E–

2028E, respectively.

Downgrade to Sell; with Lower TP at Bt13.1 — We downgrade CPAXT to Sell from Buy and lower our target price to Bt13.1. The

target price reduction reflects both our lower earnings forecasts and a cut in our target valuation multiple to 13x PE from 20x,

driven by a weaker growth outlook. Our target multiple is based on 13x PE or -1.9 S.D. below CPAXT’s 10-year average and is

derived from the relationship between earnings growth and valuation multiples across ASEAN retailers (Fig 4). The valuation is

also broadly in line with BJC target multiple, which we view as CPAXT’s closest hypermarket peer.