Kasikorn Securities (KS) reports that the overall tone of the recent CP Axtra Public Company Limited (SET: CPAXT) analyst meeting was neutral, reflecting the continued weakness in domestic consumption.
Same-store sales growth (SSSG) for the current quarter remains close to that of 3Q25 in the retail segment, while the wholesale segment is seeing only low single-digit growth. The company expects some year-on-year improvement in 4Q25 but anticipates a possible quarter-on-quarter decline due to the seasonal nature of B2B business.
Management acknowledged that 3Q25 faced multiple pressures. Gross margin suffered from higher provisions for slow-moving inventory, an unfavorable product mix, and intense promotional activity. To address these margin challenges, CPAXT plans to increase direct procurement and adjust its product mix in line with seasonal trends, which should help narrow margin gaps in 4Q25.
Other revenue streams declined due to two factors: (1) accounting restructuring after recent mergers and (2) decreased promotional support, especially for catalog advertising. However, these should recover in 4Q25 as the company increases advertising through the Makro Pro app.
Meanwhile, SG&A to revenue ratio increased, mainly due to higher commission expenses from e-commerce channels—a trend likely to continue. CPAXT is aiming to reduce reliance on marketplace platforms to manage rising commission costs.
For the Happitat project, CPAXT has reached 60% letters of agreement (LOA) for leasing targets, with an 85% pre-opening target in sight, and office occupancy remains at 40%. Both retail and office sections are slated to open together in April 2026.
Kasikorn believes that operating pressure will likely persist over the next 1-2 quarters due to a fragile economy, unfavorable weather, and rising operating costs. However, 4Q25 is expected to see a quarter-on-quarter recovery as pricing competition eases and seasonal consumer spending picks up.
KS maintains a ‘Neutral’ rating on CPAXT with a target price of THB 21.70.
