CPF Is Making A Comeback in 2024

The stock price of Charoen Pokphand Foods (SET: CPF) has surged by approximately 7% this month, reaching its highest level since early January 2023 as it continues to see gains, driven by expectations of a strong performance in the second quarter following an increase in swine prices.

CPF experienced a significant drop to nearly a decade low in late January 2024, attributed to declining swine prices and the increase of illicit pork sales in the market, leading to an oversupply situation in Thailand. At that point, the share price had fallen below the levels seen during the Covid period when the stock market witnessed multiple crashes.

UOB Kay Hian, Finansia Syrus and Maybank Thailand recently raised the target price of CPF to 28-29 baht per share, which gives about 20% upside from the current trading price of around 24 baht.

The outlook is getting brighter, driven by the surge in domestic swine prices, elevated prices in Vietnam, and improved equity income, largely attributed to China’s swine prices reaching breakeven levels.

Analysts expect to see a robust performance from CPF in the second quarter of 2024, with further growth expected in the third quarter from seasonality, rising swine prices, and declining animal feed expenses.

More importantly, CPF is likely to realize the benefits of its business reorganization in 2023, with initial results expected to manifest this year.