Analysts Expect 11% Growth for CPF on Acquiring China’s Swine Biz, Giving TP at ฿39.25

Analyst is positive toward “CPF”’s acquisition of swine business in China, expecting to drive the company’s profit next year up more than 11%. Recommending “BUY” at a target price of ฿39.25/share.

 

The acquisition of swine business in China by Chia Tai Investment Co., Ltd. (CTI), has been approved by shareholders’ meeting of both Charoen Pokphand Foods Public Company Limited (CPF) and C.P. Pokphand Co., Ltd. (CPP) on October 27, 2020 and November 2, 2020, respectively. The acquisition is expected to be completed within 2020.

 

CTI is an indirect subsidiary of CPF via C.P. Pokphand Co., Ltd (CPP), which its main business involves feed manufacturing and distribution in China, and also a listed company in Hong Kong Stock Exchange.

 

Finansia Syrus Securities recommended “Speculation” on CPF, expecting the acquisition of swine business in China to drive the company’s profit next year up more than 11% as CPF will recognize the profit from CTI’s adjustment costs of 2,600 million baht in 4Q20, while forecasting a weaker operation compared to a previous quarter because of the the low season and meat prices declined. 

 

Kingsford Securities had a positive view toward CPF’s 3Q20 operation, assessing a recovery demand following lockdowns lifted along with the support from a rising meat price overseas. Meanwhile domestic demand also signaled a rebound, therefore giving a ‘Buy’ recommendation at a target price of ฿39.25/share.