Charoen Pokphand Foods Public Company Limited (SET: CPF) saw its 3QFY25 profit decline, influenced primarily by softer swine prices and seasonal factors. However, Phillip Securities (Thailand) remains optimistic about a recovery in 4QFY25, forecasting improvements thanks to rebounding swine prices, cost reductions in animal feed, and an increased share of profit from associates.
Earnings in Line with Expectations
CPF posted revenue of Bt138 billion in 3QFY25, a 3% year-on-year decrease largely due to the impact of a stronger baht. Stripping out currency effects, sales revenue actually increased 2% year-on-year, driven by higher sales volumes. Notably, the gross profit margin improved to 16.5%, up from 15.4% a year earlier, reflecting effective cost management and lower feed ingredient costs, especially for soybean meal and corn.
Despite these positives, net profit dropped to Bt5.18 billion, marking a 54% quarter-on-quarter and 29% year-on-year decrease. This decline resulted from seasonal headwinds, weaker swine prices leading to a Bt1.1 billion loss in biological assets, and reduced earnings contributions from subsidiaries.
Swine Price Recovery Underway
Swine prices have started to rebound after a seasonal low during the Vegetarian Festival, with further recovery expected through the first half of 2026. The Swine Raisers Association’s initiatives—such as storing pork in cold storage for six months, sterilizing 100,000 piglets to manage supply, and capping pig weights at 110 kg—are expected to bolster price stability. Additional support comes from alleviated labor shortages and government economic stimulus measures boosting consumer purchasing power.
In Vietnam, domestic swine prices are also anticipated to improve thanks to better conditions concerning African Swine Fever. Meanwhile, in China, state-imposed controls on pig weights entering slaughterhouses are expected to help stabilize prices within the 11–13 yuan range.
FY25 Outlook Remains Positive
CPF’s earnings for the first nine months of FY25 account for 81.7% of Phillip’s full-year forecasts. With swine prices on the mend, lower feed costs, and improved contributions from subsidiaries, analysts expect 4QFY25 earnings to bounce back, albeit not to the levels seen in the first half of the year when swine prices peaked.
The ‘BUY’ recommendation for CPF is upheld, with a target price of Bt27.50 per share—representing a potential 36% upside from the current price—and an attractive price-to-earnings ratio compared to industry averages.
