CP All

CP All  Plc (CPALL) 

 

In line with estimates

CPALL reported 3Q15 net profit of Bt3.26bn, up 21% YoY and 4% QoQ, in line with our forecast and that of the consensus. Excluding FX gains, core profit jumped 32% YoY. Profit in 9M15 accounts for 74% of our FY15 estimate.

Results highlights

Total revenue rose 10% YoY to Bt96bn in 3Q15, while CVS sales increased 10% to Bt58bn. Same-store sales (ex-T&E) from 7-Eleven grew 1.6% YoY. Basket size increased 1.6% YoY at Bt63, while the number of tickets rose 0.9% YoY to 1,230 tickets/store/day. In 3Q15, CPALL rolled out a total of 149 7-Eleven outlets, which brought the new store total for 9M15 to 491.

CVS margin was 27.9%, up 41bps YoY, thanks to lower logistics costs and better product margin. Product margin (ex-T&E) inched up 20bps YoY to 25.9% thanks to margin improvement of food (up 10bps YoY) and non-food (up 50bps YoY) products.

SG&A expenses rose 13% YoY to Bt18bn, while the SG&A/sales ratio increased 50bps YoY to 19.6% due to marketing expenses for 7-Eleven and depreciation of new MAKRO stores.

Interest expenses declined 14% YoY and 4% QoQ to Bt2.07bn from refinancing and lower interest rates.

Outlook

The 4Q15 should be another strong quarter. CVS sales and margin expansion are likely to maintain their momentum into the quarter thanks to its successful 7-Eleven stamp campaign, while 4Q is normally the best quarter for MAKRO.

What’s changed?

Our forecast and target price have remained unchanged.

Recommendation

We maintain our BUY call on CPALL as our top pick of the sector.