On Friday at 2:33 PM (Bangkok time), the share price of CP Axtra Public Company Limited (SET: CPAXT) surged 2.08% or THB 0.40 to THB 19.60, with a trading value of THB 157.05 million.
Phillip Securities (Thailand) foresees a positive sentiment on CPAXT, citing optimism about the prospects of supportive policies from the new government, including plans for domestic income and tourism, both of which are expected to directly enhance consumer purchasing power.
In addition, CPAXT is set to expand its market reach into Malaysia with its “Lucky Frozen” brand, a move expected to drive long-term growth.
TISCO Securities highlights CPAXT’s latest development: its subsidiary, Siam Food Services, has acquired 100% of the registered share capital of Renewed Hope, a Singapore-based holding company.
Renewed Hope owns the “Lucky Frozen” brand, which imports, produces, and distributes food products for hotels, restaurants, retail, and wholesale businesses across Malaysia. The deal is valued at 1.1 billion Malaysian ringgit, or approximately THB 8.1 billion, and is being financed via loans from Thai financial institutions.
The analyst notes that Renewed Hope generates annual revenue of around THB 8.4 billion with a net profit margin of 5%. The company’s estimated price-to-earnings (P/E) ratio stands at 19x, which is slightly above the industry average of 16x.
Renewed Hope also has a net debt position close to zero, leading to an expected post-interest net profit margin of between 2% and 3%, up marginally from CPAXT’s 2% in the first half of this year.
In the long term, TISCO points out that Renewed Hope’s recovery outlook includes increasing production capacity and export potential, which would benefit the group’s food service business through greater raw material supply and new wholesale product offerings in Malaysia.
The brokerage firm remains neutral on this acquisition, noting that it offers returns comparable to CPAXT’s existing operations. However, entry into a new market and business segment is viewed as an important growth opportunity and will help diversify CPAXT’s portfolio further. As a result, TISCO maintains a ‘Buy’ rating on the company with a target price of THB 32.00 per share.
