CP All Stuck In A Trading Range As Earnings Results Were Mixed

Witawat (Ed) Wijaranakula, Ph.D.
Fri Apr 14, 2017

CP All PCL (SET:CPALL), a 40.65% stake directly and indirectly owned by the Charoen Pokphand Group Co. Ltd., operates Thailand's largest convenience store chain, cash and carry, payment centers and related support services. At the end of the fourth-quarter 2016, the company operated 9,542 7-Eleven convenience stores in Thailand, the world's second-largest 7-Eleven store network after Japan. The company expects to have 10,000 stores in 2017, ahead of the pace of its old plan. The next milestone for CP All is to open 13,000 stores nationwide by 2021. It competes with Japan's FamilyMart, Lawson Inc's Thai joint venture and Lotus Express, run by Tesco's Thai unit. 

CP All said on February 23 that its fourth-quarter 2016 revenues, ending December 31, were 111.10 billion baht, up 8.28% year-on-year, missing the 116.41 billion baht consensus estimate of the 2 analysts following the company, according to Thomson Reuters. CP All posted fourth-quarter 2016 diluted earnings of 0.47 baht per share, up 9.30% during the same quarter the previous year, inline with the 0.478 baht consensus estimate of 3 analysts. 

For the full-year 2016, CP All reported diluted earnings of 1.85 baht per share, beating the 1.83 baht per share consensus estimate of 21 analysts covering the company, on revenues of 434.71 billion baht, which were below the 443.43 billion baht consensus estimate. 

For 2016, CP All reported a dividend of 1.00 baht a share, which represents an 11.11% increase from 2015. The 21 analysts polled by Thomson Reuters expect dividends of 1.10 baht a share for the upcoming fiscal year, representing a year-over-year increase of 10.40%. CP All is expecting to report its first-quarter 2017 earnings on May 9.

From our technical viewpoint, CPALL has been moving between the trendline resistance and the 58 baht level since the end of August 2016. The stock failed to break out at the end of December but managed a record high at 65.50 baht per share. There is a good chance, but no guarantee, that the bulls might want to run up the stock ahead of the next earnings report.

According to Thomson Reuters, the consensus amongst 23 polled investment analysts covering CP All gave the company an Outperform rating, with the median 12-month price target of 72 baht a share, as of April 7, 2017.

Disclosure: No position in any companies mentioned and no recommendation.


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