Guru assessed that Saudi Lhasa imported Thai chicken in the past 17 years, resulting in CPF – GFPT good in the long term, but in the short term, the risk factors are still high. especially the cost of raw materials that is still under pressure from the Russo-Ukrainian war And there is still Brazil as a competitor, giving a target CPF of 28 baht and GFPT giving a target of 14.5-16 baht.
chicken export group It’s interesting once once more. After Mr. Jurin Laksanawisit, Deputy Prime Minister and Minister of Commerce revealed that Saudi Arabia will allow chicken imports from Thailand. After not importing for more than 17 years, the chicken factories that have been granted export rights are divided into 11 factories belonging to Charoen Pokphand Foods Public Company Limited or CPF, 6 factories and GFPT Company Limited. (Public) or GFPT, another 1 factory
KTBST is optimistic regarding the long-term CPF – GFPT.
Securities analysis from KTBST Securities Public Company Limited revealed that the issue Positive outlook on Agri & Food Industry group CPF (NR) and GFPT (Hold/Target Bt14.50) due to higher sales volume trend from higher exports to Saudi Currently, Saudi Arabia has an annual import volume of regarding 600,000 tons/year of poultry products, ranking fifth in the world, while its domestic consumption is regarding 1.5 million tons/year, of which 70% are imported from Brazil. % imported from Ukraine and France
from the Ukrainian war and Russia will be another factor that makes Saudi turn to order more products from Thailand Currently, Thailand exports regarding 930,000 tons/year of poultry products per year, with the main market being Japan 48%, EU+UK 28% and others 24%. Poultry consumption ranks 10th in the world, which will benefit the group of Thai poultry farmers in the medium-long term.
However, in the short term, the animal husbandry groups of both companies have more pressure factors from higher raw material costs. from many factors, including the war between Ukraine and Russia and Argentina The world’s largest exporter of soybean meal has announced a ban on exports of soybean meal. which is in the process of negotiating tax with local sellers including the trend of raw material costs, especially soybean meal, which will remain high throughout the year 65 due to the drought in South America that has begun to return
Assessing net profits for both companies with downside risks from raw material costs
Therefore, although the sales of CPF and GFPT may be higher than the previous analyst’s forecast. However, the estimated net profits of both companies have more downside risks due to higher raw material cost prices. Especially during the war that is not over. Recommend “speculative buy” TVO from halting Argentina’s soybean meal exports. by the current price of soybean meal After Argentina’s announcement at 525.4 USD/Ton (+5.8%) while soybean prices were at 1,687 US Cent/Bu (flat), showing a better crack margin outlook for TVO. Chicken exports recommend “Hold” GFPT
KGI says no short-term positives, but recommends buy CPF
KGI Securities (Thailand) Public Company Limited stated that although the news represents a good opportunity for the Thai chicken industry But the short-term positives are likely to be limited due to the competitive situation in the market, which CPF revealed that this case will help open a new market for Thai chicken producers. But the main competitor (Brazil) still has a competitive advantage in terms of lower feed costs. Because Brazil is a soybean producer. and large corn
At the same time, GFPT estimates the company is unlikely to receive any significant direct positives. because saudi arabia Mainly raw chicken meat is imported. While GFPT’s exports are focused on processed chicken, there may be an indirect positive if chicken exports increase causing supply for the domestic market to decline. In this case, the price of chicken in the country will go up. We maintain our BUY rating on CPF as we expect higher domestic meat prices to support the company’s earnings in 2022. Meanwhile, CPF is likely to recover from the impact of COVID-19 in terms of expenses. COVID-19-related payments likely to drop and the labor shortage problem is easing at the same time. GFPT recommends Hold as we remain concerned regarding the company’s GPM.
GFPT, on the other hand, appears to have a limited ability to pass additional costs to customers. It is assessing the impact of higher-than-expected feed costs as a result of the Russia-Ukraine dispute on meat prices and meat producer margins.
FSS looks preliminary, Thailand pilots frozen fresh chicken
Finansia Syrus Securities Public Company Limited revealed that the chicken group has benefited. Saudi has allowed 11 chickens to be imported from Thai factories, 6 of which are CPF, 1 GFPT and 1 BR (duck is also allowed). The rest are Non-listed co. This is good news because Saudi is a new market for Thailand. If Saudi Arabia imports less chicken from Ukraine and turned to import from Thailand instead will be an opportunity for Thai entrepreneurs
However, it still takes time. because entrepreneurs have to enter the market Find new customers in Saudi At first, it may be sold as frozen chicken because it is cheap and in demand in the Saudi market. CPF target price at Bt28 (FSSIA) GFPT at Bt16 (FSS)
DBSV Evaluates CPF-GFPT-TFG Benefit
Analysis DBS Vickers Securities (Thailand) Co., Ltd. estimates that exports to Saudi It takes a while to prepare. which are market specific details It is expected to begin to see exports within the second half of the year. The operators that will benefit will be companies that mainly focus on exporting frozen chicken, such as United Farms, etc. CPF, GFPT, TFG are expected to continue. Focus on exporting processed chicken because the price and profit margin are higher Therefore, the benefit from the opening of the Saudi market is not much in the short term.
However, as a whole, the increasing export market It helps to reduce the supply of chicken in the country. and keeping the domestic chicken price at 40+/- baht/kg, and this is a good opportunity in the long run.
In addition, the chicken industry faces more challenges following the Russian-Ukrainian war, with the cost of feed raw materials rising sharply. The corn price increased from 10.7 baht in Q4/22 to 13 baht/kg in the middle of March 65. and the price of soybean meal increased from 18.9 baht to 19.2 baht/kg during the same period. causing the cost of chicken production to rise (Current raising costs have risen to 40 baht/kg. Similar to domestic chicken prices from Q4/64 at around 36-37 baht/kg.) and freight rates have increased further. and boats are more difficult to find affect the delivery of goods
