Central Pattana PCL: Visible growth, resilient cashflow
- Expect 2Q26F core earnings of THB4.6bn (+7% y/y, -7% q/q), supported by growth across all business segments.
- Rental income remains the key earnings driver, benefiting from new mall openings and healthy same-store growth.
- Well-positioned to capture new domestic and international brands despite a more competitive retail landscape.
- Maintain BUY on visible multi-year earnings growth backed by one of the strongest expansion pipelines in the sector.
We forecast 2Q26F net profit of THB4.6bn, up 7% y/y but down 7% q/q. The y/y improvement should be driven by growth across all three operating segments, led by the rental business following the opening of new retail assets. Overall revenue is expected to increase 8% y/y to THB12.6bn, with the retail and office rental businesses remaining the key earnings contributors. We forecast blended gross margin to improve to 59.1% from 58.1% in 2Q25, although it should moderate from the exceptionally high 60.7% recorded in 1Q26 due to higher depreciation and operating expenses associated with recently opened projects.
Rental business
We expect rental revenue to increase 8% y/y to THB11.5bn in 2Q26F. Growth should be supported by contributions from three recently opened malls— Central Park (opened on 4 September 2025) and Central Krabi (opened on 24 October 2025) and Central Khon Kaen Campus (opened on 20 May 2026). Excluding these new projects, we estimate same-store rental revenue growth of around 3%, supported by improving shopper traffic (c.3% y/y) and healthy tenant sales growth (c.6% y/y). On a q/q basis, rental revenue should edge up by around 1%. We expect rental gross margin to improve y/y but soften sequentially due to higher depreciation and utility expenses associated with the new assets.
Hotel business
Hotel revenue is projected to rise 5% y/y to THB464mn. Growth should be driven by contributions from Go! Hotel Suvarnabhumi (opened in 4Q25), Go! Hotel Khon Kaen Campus (20 May 2026), and Go! Hotel Nakhon Sawan (1 June 2026). On a q/q basis, revenue is expected to decline 16% due to normal seasonality during the second quarter.
Residential business
Residential revenue is expected to increase 29% y/y to THB637mn. The strong y/y growth mainly reflects a low base in 2Q25, while revenue should also improve by around 5% q/q as the company continues to clear its low-rise housing inventory. We estimate low-rise products will account for nearly 60% of residential revenue in 2Q26, up from around 50% in 1Q26. As low-rise homes typically carry lower margins than condominiums, residential gross margin is expected to soften to around 28.4%, compared with 29.4% in 2Q25 and 34.4% in 1Q26.
2Q26F results review
| FYE: Dec (THBmn) | 2Q25 | 1Q26 | 2Q26F | y-o-y | q-o-q |
| Revenue: | |||||
| Rental income | 10,724 | 11,428 | 11,529 | 8% | 1% |
| Hotel revenue | 442 | 556 | 464 | 5% | -16% |
| Residential | 494 | 607 | 637 | 29% | 5% |
| Total revenue | 11,661 | 12,590 | 12,631 | 8% | 0% |
| Rental cost | (4,375) | (4,375) | (4,554) | 4% | 4% |
| Hotel cost | (159) | (177) | (158) | 0% | -11% |
| Residential | (349) | (398) | (456) | 31% | 15% |
| Cost of sales | (4,882) | (4,951) | (5,168) | 6% | 4% |
| Gross Profit | 6,778 | 7,640 | 7,462 | 10% | -2% |
| SG&A | (1,994) | (2,181) | (2,140) | 7% | -2% |
| Optg. Profit | 4,784 | 5,459 | 5,322 | 11% | -2% |
| Interest Income | 542 | 163 | 170 | -69% | 4% |
| Other Income | 486 | 762 | 500 | 3% | -34% |
| Associate Income | 507 | 794 | 760 | 50% | -4% |
| Interest Expense | (880) | (1,003) | (1,000) | 14% | 0% |
| Pretax Profit | 5,439 | 6,174 | 5,752 | 6% | -7% |
| Tax | (1,043) | (1,105) | (1,048) | 1% | -5% |
| Minority Interest | (90) | (99) | (99) | 9% | 0% |
| Core profit | 4,305 | 4,971 | 4,605 | 7% | -7% |
| Extra-ordinary items | 0 | 0 | 0 | 0% | 0% |
| Net Profit | 4,305 | 4,971 | 4,605 | 7% | -7% |
| No. of shares (m) | 4,488 | 4,488 | 4,488 | 0% | 0% |
| Eps (Bt) | 0.96 | 1.11 | 1.03 | 7% | -7% |
| Gross Margin | |||||
| Retail | 59.2% | 61.7% | 60.5% | ||
| Hotel | 64.1% | 68.1% | 66.0% | ||
| Residential | 29.4% | 34.4% | 28.4% | ||
| Blended GM | 58.1% | 60.7% | 59.1% | ||
| SGA/sales | 16.4% | 16.3% | 16.3% | ||
| Optg. Margin | 41.0% | 43.4% | 42.1% | ||
| Tax Rate | 19.2% | 17.9% | 18.2% | ||
| Net Margin | 36.9% | 39.5% | 36.5% |
Source: Company, DBSVTH
OUTLOOK
We remain positive on CPN's medium-term outlook despite a more competitive retail market. While new retail supply is expected to gradually increase over the next few years, demand continues to concentrate in well-managed destination malls with strong footfall, high occupancy and an attractive tenant mix. CPN remains well positioned to benefit from this trend, supported by its market-leading portfolio, proven asset management capabilities and ability to attract both new-to-Thailand international brands and existing tenants seeking to upgrade into prime shopping centres. The continued recovery in international tourism should also support shopper traffic and tenant sales at its flagship malls.
The company's multi-year expansion pipeline should continue to underpin earnings growth. CPN plans to open multiple retail, hotel, office and residential projects during 2026–2029, including The Central (Phaholyothin), CenTRal cENtrAL (Siam Square), GR9 and several regional developments. These projects should provide a steady stream of recurring rental income while further strengthening CPN's integrated mixed-use platform.
Potential asset recycling provides additional upside. CPN has shortlisted seven mature shopping malls for phased divestment to CPNREIT over the next eight years, beginning in 2026. We expect the first transaction to involve around two assets worth THB15–20bn in late 2026 or early 2027, although management has yet to disclose the specific assets and timing. Successful asset recycling would unlock capital from mature assets, generate additional funding for future expansion and could also result in divestment gains. We have not incorporated any asset recycling into our forecasts or valuation, pending further details from management.
RECOMMENDATION
Recent underperformance presents an attractive entry point. CPN's share price has risen 16.7% YTD, underperforming the SET Index's 30.5% gain. We believe the underperformance reflects investors' preference for AI-related beneficiaries, particularly in the electronics, power and construction sectors, rather than any deterioration in CPN's fundamentals. We view the recent weakness as an attractive buying opportunity, supported by resilient recurring earnings, a visible multi-year expansion pipeline, strong cash flow generation and an attractive valuation.
Maintain BUY with a DCF-based TP of THB74.25. We continue to view CPN as one of the highest-quality names in the Thai property sector, underpinned by its dominant retail platform, resilient recurring income, strong balance sheet and proven execution track record.
PE and PBV Bands
PE Band | PBV Band |
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| Source: Setsmart, DBSVTH | Source: Setsmart, DBSVTH |
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