CPAXT – 3Q26F: One-off losses hit earnings

We expect a 3Q26F net loss of Bt237mn, turning from net profit of Bt1.9bn in both 3Q25 and 2Q26. Excluding Bt1.8bn in one-off losses from B2B and B2C store closures, 3Q26F core profit is estimated at Bt1.56bn, down 16% YoY and 17% QoQ, mainly on higher SG&A and weaker B2C SSS. We cut our 2026F/2027F earnings by 22%/4%, pricing in one-off expenses and weaker-than-expected B2C SSS. Despite an expected 4Q26 recovery on a low base for sales and margins, key risks remain continued B2C SSS pressure from Thai Help Thai Plus in Oct-Nov and Habitat losses in its first full quarter of operations. We maintain NEUTRAL with a new mid-2027 DCF-based TP of Bt16 (WACC 7.5%, LTG 1.5%), down from Bt17 following our earnings cuts.

3Q26F net loss to be Bt237mn, turning from net profit of Bt1.9bn in both 3Q25 and 2Q26. We estimate one-off expenses (net of tax expenses and income) of Bt1.8bn, consisting of about Bt50mn related to the closure of a B2B hypermarket store in Siem Reap, Cambodia, amid a weak economy and sluggish tourism, and about Bt1.75bn in impairment losses from selected loss-making B2C Lotus’s Go Fresh store closures to improve operational efficiency and long-term profitability. The closed Go Fresh stores represent around 7% of Lotus’s total NSA, or 0.13mn sq.m., versus its previous total NSA of 1.9mn sq.m.

Excluding one-off losses, we estimate 3Q26F core profit at Bt1.56bn, down 16% YoY and 17% QoQ, representing one of the weakest YoY earnings performances among our commerce stocks under coverage. The YoY decline was mainly dragged by higher SG&A expenses and B2C SSS contraction, which more than offset slight improvements in B2B SSS and gross margin. We estimate a neutral earnings impact from The Food Purveyor (TFP), a Malaysian premium supermarket operator acquired in Sep 2026, as its additional sales contribution was offset by acquisition-related expenses. The QoQ decline was mainly due to seasonality.

3Q26 highlights. Sales grew 1% YoY, supported by the consolidation of Lucky Frozen, a Malaysian foodservice business acquired in Sep 2025, and TFP from Sep 2026, with TFP contributing around 4% of Sep B2C sales (or 2% of consolidated sales). B2B SSS rose 0.5% YoY as stronger sales in Thailand, backed by Thai Help Thai Plus among food retailers and HoReCa customers, more than offset weaker overseas sales. In contrast, B2C SSS contracted 5% YoY, pressured by Thai Help Thai Plus and fragile consumer spending in Thailand, partly offset by positive SSS in Malaysia. Gross margin widened 10bps YoY, supported by better pricing and shrinkage management across B2B and B2C, as well as higher fresh food prices in B2B. SG&A/sales rose 60bps YoY, driven by higher personnel costs and last-mile delivery expenses to support B2B O2O sales, as well as Habitat-related expenses in B2C. Other income rose YoY, due to ongoing data monetization revenue.

Earnings cut and outlook. We cut our earnings forecasts by 22% in 2026F and 4% in 2027F, factoring in one-off losses of Bt1.8bn in 3Q26F (B2B and B2C store closures) and weaker-than-expected B2C SSS. We expect its core earnings to recover in 4Q26, supported by a low base for both sales and margins following 4Q25’s B2C IT disruption, Thai-Cambodia border tensions and southern Thailand floods. Key factors to monitor are the Oct-Nov extension of Thai Help Thai Plus, which could continue to weigh on B2C SSS, and Habitat losses in its first full quarter of operations.

Key risks are changes in government policies and purchasing power. Key ESG risks are energy & waste management, sustainable products (E) and product quality management, labor practices and data privacy (S).