CP ALL

CP ALL Plc (CPALL)

Core profit +35%YoY, +9% QoQ to Bt2.9bn. Profit came in 8% above consensus
(Bt2.65bn) and in line with SCBS. Profit for 9M12A rose 31% YoY to Bt8.2bn, 72% of our
full-year forecast. We expect to see earnings upgrades by the street: we are 9% ahead
of consensus for this year and 6% for next. Revenue was +21% YoY to Bt21bn, on record
high SSS growth of 16.0% and new stores and gross margin rose 56bps YoY to 25.5%.
This was slightly below our assumption, but offset by sales promotion income from
suppliers who offered extra stamp promotional items at their own expense; this is in
“other income” which rose 59% YoY to Bt2.5bn.

Highlights:

Q3 2012 SSS growth +16.0%YoY from +10.5% in Q2 2012 and 8.8% in Q3 2011.
Management attributed the record high SSS growth to the success of its stamp
promotion that boosted both traffic and spending. Suppliers were back in full after
the floods, providing a large amount of products for this promotion at their own
expense.

Already 497 new stores in 9M12 vs. full-year target of 500. CPALL added 113
new stores in 3Q12, to bring the total to 6,773 nationwide. It said it will now
reallocate resources to renovations: it has already renovated ~400 stores with up
to 600 this year.

Q4 2012F: Profit to double YoY to a new high of Bt3.2bn. Unlike other retailers,
we do not see downside risk to our Bt3.2bn Q4 2012 implied profit. Faster-thanexpected
store rollout and stronger-than-expected SSS growth (estimated SSS
growth of 9M12 is 9% vs. our full-year forecast of 8.0%) will help offset our gross
margin assumption, which may be a little on the high side.

Remains our top pick for the sector, yearend 2013F target price of Bt46/sh.
We roll over our DCF-based target price from mid-2013 to year end-2013. YTD
CPALL stock price is up 56% vs. SETCOMM’s 60% (MAKRO +81% and BJC +122%) and it
is likely to outperform, given greater growth in earnings than the market expects
in 2012-3.