Phillip Securities (Thailand) expects Charoen Pokphand Foods Public Company Limited (SET: CPF) to report a weaker 3Q25 performance due to falling pork prices both domestically and abroad. However, the brokerage foresees a rebound starting in 4Q25 as pork prices recover following the engine of the vegetarian festival, signaling a bottom has likely been reached. For the full year, CPF’s profit is forecast to grow thanks to a low base last year and persistently low raw material costs. Phillip maintains a “BUY” recommendation with a target price for 2025 of THB 27.50 per share, representing an upside of around 30%.
Strong 1H25 Profit on Higher Pork Prices and Lower Inputs
CPF posted a net profit of THB 18.9 billion in 1H25, up 133% YoY, driven by higher pork prices in Thailand and abroad, lower feed costs, efficient expense management, and increased profit sharing from associates. Revenue was THB 291 billion (+1% YoY, +6% YoY excluding FX impact), with gross profit at THB 55.3 billion (gross margin 19.1% vs. 14.6% last year).
2H25 Outlook: Sluggish Pork Prices to Weigh on Earnings
For 3Q25, Philip projects a double-digit earnings decline, pressured by falling pork prices. In Thailand, average pork prices dropped 27% QoQ and 10% YoY due to seasonal factors, heavy rains, weakened purchasing power, and labor shortages. Vietnamese pork prices also slumped 12.5% QoQ and 4.4% YoY amid disease outbreaks, while China continues to face price pressure from local overproduction (-6.1% QoQ, -29.5% YoY).
4Q25 and Beyond: Signs of Recovery Post-Festival
Looking to 4Q25, Phillip expects pork prices to have already hit bottom in September, with recovery likely after the vegetarian festival, driven by support policies, easing labor shortages, entry into high season, and potential government stimulus. These factors should lift both pork and chicken prices and support earnings growth QoQ and YoY.
Share Buyback to Limit Downside During Slowdown
CPF recently announced a share repurchase program worth up to THB 8 billion (maximum 350 million shares, or 4.16% of shares outstanding) from 8 October 2025 to 7 April 2026. The buyback is aimed at improving liquidity and enhancing returns to shareholders, helping to limit stock downside during the industry downturn.
