December 4, 2007

Thailand's Charoen Pokphand Foods: Net profit at US$24 million for Q4

Charoen Pokphand Foods (CPF) is expected to register good fourth quarter results with net profit estimated at US$24 million.

The increase is a 194-percent increase on-year and 42 percent quarter-on-quarter.

The share price may be affected by softer pork prices in fourth quarter, but it is seasonal. In the longer-term, pork prices are projected to rebound in late 2007.

Financial year 2007 and FY2008 earnings are retained. Target price remains at US$0.21, implying a 40-percent upside potential.

Meanwhile, CPF announced that its fully-owned subsidiary, CT Quanzhou, has agreed to increase the registered capital of a joint ventures company, by US$4.8 million to US$11 million.

Additionally, its Chia Tai subsidiary agreed with Chengdu Zhong Ji Investment for the establishment of the new JV company, which would be engaged in the production and sale of animal feed, poultry, swine and aqua products.

The new JV firm will be 20 percent owned by Chengdu Zhong Ji Investment and 80 percent by Chia Tai.