Kiatnakin Phatra Securities (KKPS) maintained its “Neutral” rating with a target price of THB 16.70 per share for CP Axtra Public Company Limited (SET: CPAXT) following the company’s analyst meeting on Thursday at Happitat, where management provided updates on its site visit and the acquisition of The Food Purveyor in Malaysia.
CPAXT’s acquisition of The Food Purveyor, valued at MYR 1.66 billion, or approximately THB 13.5 billion, received regulatory approval on September 1. The Food Purveyor is a premium supermarket operator in Malaysia, previously majority-owned by private equity firm Navis Capital Partners.
According to CPAXT, The Food Purveyor operates around 50 stores, mainly under the Village Grocer, BSC Fine Foods, and The Food Merchant banners, with its store network concentrated in urban areas. CPAXT stated that The Food Purveyor’s revenue grew at around twice Malaysia’s grocery industry growth rate of 4% in 2025, and expects The Food Purveyor to contribute around 4% to CPAXT’s retail sales in 2027.
KKPS said it is neutral on the transaction. While the strategic rationale appears reasonable, the acquisition valuation looks relatively demanding and is expected to provide only modest near-term earnings accretion. The brokerage estimated the implied acquisition valuation at around 28 times PER, assuming a 5% net margin for The Food Purveyor.
KKPS also estimated that, assuming 80% of the acquisition is debt-funded at a 3% interest rate, The Food Purveyor would contribute only around 2% to CPAXT’s 2027 estimated net profit after tax.
However, KKPS sees potential longer-term strategic benefits from the deal. The Food Purveyor will expand CPAXT’s presence from the mass grocery segment into the higher-end grocery market in Malaysia, strengthening its market positioning. The larger combined procurement scale could also improve bargaining power with suppliers, while The Food Purveyor’s existing store network and secured pipeline of future locations may support CPAXT’s expansion in Malaysia.
