CPF-TU: Delighting the Profit

CPF and TU didn’t make investors disappointed after reporting a record operating profit in 2Q20 amid Covid-19 outbreak.

Charoen Pokphand Foods Public Company Limited (CPF)’s share price was below 30 baht for a while and just broke the 30 baht resistance level, supported by a buying pressure from institutional, major and individual investors.

CPF ended up posting a net profit of 6,028 million baht in 2Q20 baht increased 47% from the same period of last year at 4,104 million baht. The revenue from sales was 143,805 million baht which increased 7% YoY, as a result of a 12% increase in sales from oversea operation and 2% decrease in Thailand operations.

Gross profit margin in 2Q20 was at 18%, increased from 14% in the same quarter last year. This was mainly due to an increase in swine price in Asia which resulted from the decline of swine population from the spreading of ASF (African Swine Fever). Aquaculture business in Thailand has also improved significantly due to efficiency improvement in operations.

Consequently, CPF booked a profit of 12,139 million baht for the 6-month period of 2020, increasing from 8,383 million baht a year earlier. 

Even facing a sell on fact after announcing the operating results, analysts still believe that swine prices will stay at a high level, enhancing CPF continuous growth. 

Apart from CPF, Thai Union Group Public Company Limited (TU) also reported an all-time high profit of 1,716 million baht, up 15x or 1,440% from a net profit of 111 million baht in 2019. 

TU has been expected to be benefited from Covid-19 outbreak following the surge in demand for canned foods in the USA. The strong growth was delivered despite a high share of loss from Red Lobster affiliate due to the city shutdown. 

Sales performance increased by 2.6% YoY to 33,051 million baht, driven mainly by an increase in ambient seafood business of 16.8% YoY as consumers practice social distancing and home cooking. While frozen business saw sales decline of 14.0% due to the city lockdown.

Meanwhile 2Q20 gross profit was 6,027 million baht increased from 5,364 million baht in 2Q19 and gross margin was at a quarterly record level of 18.2%, up 1.59%…Well-performed, TU!