CP ALL: Growth to remain resilient
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Earnings preview
Resilient growth expected in 3Q25F despite worsening weather conditions and a drop in inbound tourists. We estimate CPALL to register a 3Q25F core profit of THB6.6bn (+7.4% y/y, -5.0% q/q). The softer q/q was due to seasonality, whereas y/y growth was mostly driven by store expansion and CVS (7-Eleven) gross margin improvement. We expect no material extra items in 3Q25F unlike the one-time expenses at CPAXT (mostly amalgamation costs), resulting in 3Q25F net profit at THB6.7bn (+19.0% y/y, -1.4% q/q).
We anticipate an overall net margin of 2.8% in 3Q25F (+40bps y/y) following consolidated gross margin expansion from improving gross margin in 7-Eleven, as well as a higher contribution of the CVS business given faster topline growth (which typically yields a higher gross margin).
Excluding profit contribution from CPAXT, we forecast CVS’s standalone net profit at THB5.2bn (+17.9% y/y, -2.5% q/q) in 3Q25F. We note that the softer q/q earnings were impacted from seasonality and a slowdown in consumption. On a y/y basis, performance was still supported by store expansion and gross margin improvement during the period.
CVS: 3Q25F highlights
SSSG to be flattish in 3Q25F. We forecast CPALL to post a 3Q25F CVS revenue growth of THB113.2bn (+5% y/y, -3.8% q/q). Revenue growth should be mainly supported by store expansion (+4.9% y/y). The flattish CVS SSSG, meanwhile, would be weighed down by lower domestic mobility, lower tourist numbers, and worsening weather conditions, resulting in lower store traffic of 940/store/day (-2.5% y/y, c.82% of pre-pandemic level).
Nonetheless, ticket size remained healthy at THB86 (+2.4% y/y, c.123% of the pre-pandemic level). In 3Q25F, we estimate that CPALL opened 200 7-Eleven stores, operating 15,795 stores as of end-3Q25 and on track with its full-year forecast of opening 700 stores in 2025 (550 stores opened YTD).
Healthy gross margin maintained. CVS’s gross margin remained healthy at 29.4%, continuing to expand 30bps y/y and 10bps q/q. The wider y/y margin was supported by a better product mix after strong demand of ready-to-eat, beverage, personal care and healthcare products (despite normalising benefits from lower mix of cigarettes). Meanwhile, gross margin would likely be supported by higher DC efficiency. We also expect some benefits from better cost leverage and utility costs reflecting slightly lower SG&A-expenses-to-sales, from 29.2% in 3Q24 to 29.1% in 3Q25F.
CPAXT: 3Q25F highlights
3Q25F growth to contract y/y. We forecast 3Q25F core profit at THB2.4bn (-0.4% y/y, +2.7% q/q). The small y/y contraction would be weighed down by softer gross margin despite a well-controlled SG&A expense. We estimate Makro (wholesale business) and Lotus’s (retail business) to deliver flattish SSSGs in 3Q25F. For Lotus’s, we estimate SSSG for Thailand operation to slightly contract at low-single-digits with strong SSSG in Malaysia following domestic stimulus measures. We also expect CPAXT’s sales growth to inch up 0.3% y/y.
Note that the flattish SSSG was weighed down by lower demand of cooling items and beverages during the quarter from Thailand’s different weather conditions and the high base in September 2024 after cash handouts were distributed to a vulnerable group of people.
CPAXT’s consolidated GPM is expected to decline y/y, mostly on less favourable products and pressure from price competition on retail business, which outpaced synergy benefit impacts. In 3Q25F, we expect SG&A expenses to be well controlled and show a small improvement y/y.
Outlook
Growth likely to be more exciting in 4Q25. MTD, 7-Eleven’s SSSG would likely remain at the same level as 3Q25 following rising uncertainties – which slowed down local consumption – and weak inbound tourism. Nonetheless, we believe the upcoming stimulus measures from government (Co-payment Plus scheme) would boost local consumption in 4Q25.
Also, in 4Q25, we expect inbound tourism to recover with an easing uncertainty situation i.e. domestic politic stability and the US reciprocal tariff which would bring back consumer confidence during the high season. Meanwhile, we estimate more material synergy benefits at the CPAXT level in 4Q25, which should further support margin expansion.
We note that the raise of minimum wages to THB400 in Bangkok from 1 July 2025 would have very limited impact from both CPALL and CPAXT as the company has gradually increased wages for their staff and mostly pay more than the new minimum wages of THB400 per day.
Recommendation
Reiterate BUY with an unchanged DCF-based TP of THB69.00. We maintain our earnings forecast for FY25F as the current outlook is on track with our full-year estimate. In 2025, we estimate CVS’s SSSG to be 3% and Makro and Lotus’s to be 2%. Gross margin is expected to further improve by 20-25bps across all business units. Net-net, we expect core profit growth of 14% in FY25F. The stock is trading at an attractive valuation, -1.3SD of its five-year historical average. We maintain BUY on CPALL for its continued strong earnings momentum and defensive appeal.
Quarterly / Interim Income Statement (THBmn)
FY Dec (Btm) | 1Q24 | 2Q24 | 3Q24 | 4Q24 | 1Q25 | 2Q25 | 3Q25F | Chg. | Chg. |
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| yoy | qoq |
Sales | 234,315 | 240,948 | 234,044 | 249,691 | 245,798 | 248,865 | 239,895 | 2.5% | -3.6% |
Cost of Goods Sold | (182,093) | (186,899) | (180,869) | (192,630) | (189,685) | (192,170) | (184,479) | 2.0% | -4.0% |
Gross Profit | 52,223 | 54,049 | 53,175 | 57,061 | 56,113 | 56,695 | 55,416 | 4.2% | -2.3% |
Other Operating Income | 6,525 | 6,827 | 7,105 | 7,689 | 6,891 | 7,567 | 7,282 | 2.5% | -3.8% |
SG&A Expenses | (46,541) | (48,836) | (48,307) | (50,591) | (48,951) | (51,115) | (49,735) | 3.0% | -2.7% |
Operating Profit | 12,207 | 12,039 | 11,973 | 14,159 | 14,054 | 13,147 | 12,963 | 8.3% | -1.4% |
Interest Income | 168 | 168 | 134 | 121 | 166 | 142 | 145 | 8.5% | 2.0% |
Interest Expense | (3,902) | (3,878) | (3,861) | (3,854) | (3,769) | (3,803) | (3,780) | -2.1% | -0.6% |
Associate Income | 174 | 149 | 173 | 177 | 106 | 144 | 160 | -7.5% | 11.1% |
Exceptional Gains/(Losses) | 298 | 84 | (588) | 198 | 25 | (237) | 20 | -103.4% | -108.4% |
Pretax Profit | 8,944 | 8,563 | 7,830 | 10,801 | 10,582 | 9,393 | 9,508 | 21.4% | 1.2% |
Tax | (1,643) | (1,476) | (1,234) | (2,029) | (1,955) | (1,724) | (1,873) | 51.8% | 8.7% |
Minority Interests | (982) | (847) | (988) | (1,593) | (1,042) | (901) | (963) | -2.6% | 6.9% |
Net Profit | 6,319 | 6,239 | 5,608 | 7,179 | 7,585 | 6,768 | 6,672 | 19.0% | -1.4% |
Norm. profit | 6,022 | 6,155 | 6,196 | 6,981 | 7,560 | 7,006 | 6,652 | 7.4% | -5.0% |
Key statistics |
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Consolidated FS |
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Gross Margin | 22.3% | 22.4% | 22.7% | 22.9% | 22.8% | 22.8% | 23.1% | 0.4 | 0.3 |
SGA % Sales | 19.9% | 20.3% | 20.6% | 20.3% | 19.9% | 20.5% | 20.7% | 0.1 | 0.2 |
Operating Margin | 5.2% | 5.0% | 5.1% | 5.7% | 5.7% | 5.3% | 5.4% | 0.3 | 0.1 |
Net Margin | 2.7% | 2.6% | 2.4% | 2.9% | 3.1% | 2.7% | 2.8% | 0.4 | 0.1 |
Core Net Margin | 2.6% | 2.6% | 2.6% | 2.8% | 3.1% | 2.8% | 2.8% | 0.1 | (0.0) |
Effective Tax Rate | 18.7% | 17.5% | 16.1% | 19.1% | 18.7% | 18.6% | 20.0% | 3.9 | 1.4 |
Separated FS |
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SSSG - 7-Eleven | 4.9% | 3.8% | 3.3% | 4.0% | 3.0% | -0.8% | 0.0% | (3.3) | 0.8 |
Traffic ('000/store/day) | 972 | 1007 | 964 | 965 | 963 | 966 | 940 | -2.5% | -2.7% |
Ticket size (THB) | 85 | 86 | 84 | 83 | 88 | 88 | 86 | 2.4% | -2.3% |
No. of stores | 14,730 | 14,854 | 15,053 | 15,245 | 15,430 | 15,595 | 15,795 | 4.9% | 1.3% |
Revenue (THB mn) | 105,861 | 112,044 | 107,850 | 114,032 | 113,970 | 117,706 | 113,243 | 5.0% | -3.8% |
GPM (%) | 28.7% | 29.0% | 29.1% | 29.1% | 29.4% | 29.3% | 29.4% | 0.3 | 0.1 |
Other income to sales (%) | 5.9% | 5.8% | 6.2% | 6.1% | 5.8% | 6.2% | 6.2% | (0.0) | (0.0) |
SG&A to sales (%) | 28.2% | 28.9% | 29.2% | 29.2% | 27.9% | 29.3% | 29.1% | (0.1) | (0.2) |
Net profit (excl. CPAXT's contribution) | 4,833 | 4,936 | 4,439 | 4,807 | 6,002 | 5,369 | 5,234 | 17.9% | -2.5% |
CPAXT - Consolidated FS |
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SSSG - Wholesale | 3.4% | 1.8% | 1.5% | 0.4% | 1.0% | -1.2% | 0.0% | (1.5) | 1.2 |
SSSG - Retail | 6.9% | 3.6% | 2.4% | 1.9% | 0.5% | 0.0% | 0.2% | (2.2) | 0.2 |
Revenue (THB mn) | 126,157 | 126,956 | 123,727 | 132,638 | 129,300 | 129,080 | 124,098 | 0.3% | -3.9% |
Net Profit (THB mn) | 2,481 | 2,176 | 1,952 | 3,960 | 2,643 | 2,337 | 2,401 | 23.0% | 2.7% |
Core Profit (THB mn) | 2,481 | 2,176 | 2,410 | 4,015 | 2,643 | 2,337 | 2,401 | -0.4% | 2.7% |
Source: Company, DBSVTH
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Related Stories
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- CP ALL: 2Q25F showed decent growth despite adverse economic situation17 Jul 2025
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- CP ALL: Earnings performance defensive14 Aug 2025
- CP ALL: 2Q25F showed decent growth despite adverse economic situation17 Jul 2025