Charoen Pokphand Foods Public Company Limited (SET: CPF) reported second-quarter 2026 net profit of THB 4.08 billion, down 61% year-on-year and 16% quarter-on-quarter, as weak swine and broiler prices across Thailand, Vietnam and China weighed on results. Still, four brokerage houses covering the stock — Beyond Securities, FSSIA (Finansia), InnovestX and Asia Plus Securities — all maintain “Buy” recommendations, with target prices ranging from THB 24.00 to THB 27.00, arguing that the second quarter likely marked the bottom of the earnings cycle before a recovery takes hold in the second half of the year.
Weak 2Q26, In Line With Expectations
Core profit, which strips out a roughly THB 540 million biological loss tied to falling livestock valuations, came in at THB 4.57 billion, up about 6% quarter-on-quarter but down 58% from a year earlier. Analysts said the result was largely in line with forecasts. The year-on-year decline stemmed mainly from a sharp drop in domestic swine prices — Thai hog prices averaged around THB 60/kg in the quarter versus THB 88/kg a year earlier — alongside weaker prices in China and higher feed costs, particularly for corn, which spiked to roughly THB 11.7–12.8/kg during the quarter. Gross margin slipped to about 15% from around 18.5% a year earlier.
Revenue rose about 8% quarter-on-quarter to THB 147.2 billion, helped by strong growth in Vietnam (up 14% quarter-on-quarter and roughly 8% year-on-year) on higher volumes and a weaker Vietnamese dong. Equity income from associates fell sharply, down around 11% quarter-on-quarter and 66% year-on-year, dragged by softer contributions from CPALL and wider losses at CTI, CPF’s Chinese swine business.
Meat Prices Turning Higher
All four brokers pointed to a recovery in meat prices since the quarter closed. Thai swine prices have climbed to around THB 71–72/kg in August, well above breakeven levels near THB 60–62/kg, as breeding stock fell 4–5% following African Swine Fever and PRRS outbreaks earlier in the year. Management expects Thai hog prices to hold in the THB 70–72/kg range in the third quarter and potentially rise further in the fourth quarter on seasonal demand.
In China, swine prices have recovered from roughly CNY 9–10/kg to about CNY 10.7–10.9/kg, with further gains to CNY 12.5–13.0/kg expected by the fourth quarter as Beijing tightens control over breeding stock and enforces stricter environmental rules — a shift expected to meaningfully narrow losses at CTI. Vietnamese swine prices, while easing seasonally to around VND 59,000–65,000/kg in the third quarter, remain well above the roughly VND 45,000/kg cost of production. Thai chicken prices have also rebounded to around THB 42–44/kg on stronger export demand from Europe, the UK, and Japan.
Feed Costs Easing
Domestic corn prices, which spiked to around THB 12.8–13/kg in June, have since retreated toward THB 10/kg as the new harvest reaches the market, with imports from the United States — CPF’s first shipment of roughly 50,000 tonnes — expected to begin in the fourth quarter to help evaluate quality before larger-scale purchases. Soybean meal costs remain elevated versus last year but are described as manageable given the company’s practice of locking in supply more than six months in advance.
Vietnam IPO
All four reports flagged the planned listing of subsidiary CP Vietnam on the Vietnamese stock exchange as an ongoing catalyst, still pending approval from Vietnam’s securities regulator, with management continuing to target a listing by the end of 2026 or into early 2027. Proceeds are expected to help unlock asset value and reduce debt.
Broker Recommendations
- Beyond Securities maintains “Buy” with a target price of THB 26.70, based on 10x projected 2027 core earnings, citing recovering profitability and an attractive dividend yield alongside the CP Vietnam listing catalyst.
- FSSIA (Finansia) maintains “Buy” with an unchanged target of THB 24.00, keeping its 2026 net profit forecast at THB 17.8 billion (down 29.3% year-on-year) with an 11.7% rebound expected in 2027.
- InnovestX upgraded CPF from “Neutral” to “Outperform,” raising its target to THB 27.00 (mid-2027 basis, versus a prior end-2026 target of THB 23.00) using a sum-of-the-parts approach — THB 6.5 for the core feed, farm and food business and THB 20.5 for its stakes in CPALL and CPAXT. The firm also raised its 2026 and 2027 core profit forecasts by 5% and 10%, respectively.
- Asia Plus Securities maintains “Buy” with a target price of THB 25.00, based on 2027 earnings, citing improving gross margins if current meat prices hold through the third quarter.
Key Risks
Brokers cited several risks to the outlook, including weaker-than-expected consumer purchasing power, a slower pace of meat price recovery, higher feed costs, a stronger Thai baht, and rising labor costs. Disease outbreaks affecting livestock and tightening environmental regulations were also flagged as ongoing risk factors for the business.
