CP All stock rebounds on earnings recovery despite inflation 

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CP All Plc (CPALL), the operator of 7-eleven convenience stores, saw its shares bounce to a one-month high on Thursday, fueled by recovery prospects following tourism revival despite rising inflation.

CPALL rose by 3.26 per cent from its prior closing to 64 baht as of the morning session, regaining ground lost a month earlier. 

Analysts at KTB Securities said in a note that the company will likely earn higher income from the spike in product prices as Thailand’s inflation soars to a near 14-year high. 

Despite weaker domestic purchasing power due to inflation, the 7-eleven store operator is set to benefit from the tourist influx after the end of Thailand Pass, according to KTB. “We estimate CPALL to see the influence from product price hikes in the second half of 2022.”

In light of the Covid-19 pandemic, CPALL had endured losses due to the travel ban that barred one of its key income sources from foreign visitors. Its full-year earnings fell by 28 per cent year-on-year in 2020 and 19 per cent in 2021.

However, with the country’s reopening and the resumption of economic activities, its first-quarter earnings increased by 33 per cent year-on-year. Analysts also predict the company to report a strong earning jump of around 75 per cent year-on-year for the second quarter.

As the end of March 2022, CPALL runs over 13,200 7-eleven stores across the country.

According to Yuanta Securities’ research, people may prefer to buy more regularly at convenience stores in nearby locations to save money on commuting, boosting sentiment for convenience store operators.

Other retail stocks also shared the rise, with Central Retail Corporation Plc (CRC) and Berli Jucker Plc (BJC) gaining 2.19 per cent to 25 baht and 1.59 per cent to 32 baht, respectively. 

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