UBS has upgraded Charoen Pokphand Foods Public Company Limited (SET: CPF) to “Buy” and raised its price target to Bt25.00 (from Bt21.00), citing improved earnings prospects and an attractive valuation. The 2026-27E earnings estimates were increased by 18-32% as UBS expects better margins, underpinned by a rebound in swine prices in the second half of 2026 and manageable feed costs due to falling oil prices and potential US corn imports.
The report underscores that CPF’s valuation, excluding its CPALL stake, now trades close to historical lows, with its projected 2027 PE of 7.1x representing discounts of approximately 7% and 43% to Thai and global peers, respectively.
UBS anticipates the current gradual upturn in Thai swine prices will continue, forecasting prices to reach Bt76/Kg by Q2 2027. The gradual upcycle is expected to be supported by a slower increase in new swine raised, a probable El Niño event reducing swine supply, and government stimulus boosting demand. However, the firm does not expect prices to exceed Bt76/Kg due to less severe outbreaks of foot-and-mouth disease compared to prior cycles.
Feed costs remain a concern but are likely to be manageable, according to UBS. A strong El Niño from November 2026 to January 2027 may impact the secondary crop of Thai corn, but the primary crop—which makes up 70% of annual output—should be less affected. Increased soybean yields from Brazil and potentially cheaper US corn imports are also seen as mitigating factors for feed costs.
UBS’ sum-of-the-parts (SOTP) price target of Bt25 is based on the 2027 PE average of 7.6x for Thai food peers and the current market capitalization of CPALL, in which CPF holds a 34.84% stake. CPF has underperformed the SET and SETFOOD indices year-to-date by 31% and 13%, respectively, but UBS sees limited downside going forward, backed by improving return on equity (ROE) and operational outlook.
