CPN – Winning the sprint and the marathon

We keep our positive view on CPN, as the company has a promising short-term and long-term outlook. In the short term, we expect its 3Q26F core earnings to grow YoY and QoQ. For the long term, growth will be driven by its plan to enter Vietnam, more shopping mall opportunities in Thailand over the next five years, and its mega project in Rangsit. Its share price has underperformed the SET index by 6% in the past two weeks. Given its strong outlook, we view this as a buying opportunity. We maintain our OUTPERFORM rating with a mid-2027F DCF-based TP of Bt85 (7.2% WACC and 1.5% LTG).

Vietnam is a long-term expansion opportunity for CPN. This is driven by its population of about 100mn young people, strong economic growth, steady FDI inflows, and consumer behavior similar to Thailand. The company is now looking to enter the market with its core regional mall and mixed-use formats. The main challenge is finding the right land at a reasonable price. We view this as a long-term upside to our earnings forecast. Success in Vietnam could also lead to a higher valuation.

There is still ample room to expand in Thailand. While the company's planned expansion into Vietnam raises the question of whether its room for growth in Thailand is limited, we believe Thai market has not yet reached maturity. Based on CPN’s five-year CAPEX plan (2026–2030), majority of its investment is still directed toward domestic malls, indicating expansion opportunities remain in Thailand.

Update on Rangsit project. This project is a long-term township development on a 750-rai land plot. It will be built in phases over 10-20 years. CPN will focus on commercial development in the first phase, led by one of its largest flagship super regional malls. Because the project is so large, CPN plans to bring in partners to develop the non-retail areas instead of building everything alone. The needed capital spending is already included in its five-year CAPEX plan.

Expect 3Q26F core earnings to grow YoY and QoQ. Shopping mall traffic in Jul is expected to show stronger YoY growth of 4%, outpacing the low single-digit growth seen in 2Q26, which faced headwinds from Middle East tensions. Tenant sales should also post a solid 8% YoY growth, driven by a broad-based recovery across all business segments. Furthermore, we expect the ongoing transfer of Dusit Residences units to continue supporting 3Q26F core earnings.

Maintain 2026F forecast and OUTPERFORM rating. We keep our 2026F core profit forecast at Bt18.3bn, up 9.6% YoY. Note that its 1H26 core profit made up 52% of our full-year forecast. Its share price has fallen by about 5% in the past two weeks, compared to a 1% gain for the SET, but its business outlook remains positive for 2H26F. Its valuation is now at a 2026F PE of 15.7x (-0.5 SD) with a 3.9% dividend yield. We believe the risk-reward at this level is attractive. Therefore, we maintain our OUTPERFORM rating with a mid-2027F DCF-based TP of Bt85. We still like CPN for its stable earnings during global uncertainty and good earnings growth.

Risks and concerns. Key concern is weak domestic consumption. Key ESG risk is climate adaptation and mitigation that could negatively impact revenue, rising carbon offset costs and physical impact to its malls.