Recovery priced in, earnings still lag

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Recovery priced in, earnings still lag

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Charoen Pokphand Foods

Reiterate Rating: NEUTRAL | PO: 23.00 THB | Price: 22.20 THB

Too much optimism, reiterate Neutral 13 July 2026

We raise our 2026-28 earnings forecasts by an average of 4.5% and increase our target Equity

price to Bt23 to reflect higher margin assumptions for Vietnam and our transition to a

sum-of-the-parts (SOTP) valuation methodology to incorporate our price objectives for

Key ChangesCPALL and CPAXT (after applying a 20% holding-company discount). However, we

maintain our Neutral rating for three reasons. First, CPF's recent share price rally has (Bt) Previous Current

already priced in much of the improvement in China hog prices. While we believe the Price Obj. 22.20 23.00

industry's trough is now behind us, we continue to expect a gradual recovery rather than 2026E Rev (m) 576,014.8 584,473.9

the start of a new upcycle. Second, demand remains softer than expected across CPF's 2027E Rev (m) 587,567.2 598,102.4

key markets. As a result, tighter supply alone is unlikely to drive hog prices to the high 2028E Rev (m) 599,351.5 584,048.3

profitable levels seen in previous cycles, particularly in Thailand. Third, although losses in 2026E EPS 2.20 2.41

China should continue to narrow, near-term earnings remain under pressure, limiting the 2027E EPS 2.55 2.82

scope for a further re-rating. We forecast 2Q26 normalized profit of Bt4.4bn, down 9.0% 2028E EPS 2.73 2.69

QoQ and 58% YoY, and do not expect a meaningful earnings growth turnaround before

4Q26. Sarachada Sornsong ^^^

Research Analyst

Kiatnakin Phatra Securities

+66 2 305 9197China recovery is tangible but not an upturn sarachada.sorn@kkpfg.com

China hog spot prices have rebounded from Rmb9.4/kg in late June to Rmb11.2/kg,