Company update Tue, Nov 10, 2020

Charoen Pokphand Foods CPF

Charoen Pokphand Foods Bloomberg CPF TB Public Company Limited Reuters CPF.BK

Tactical: OUTPERFORM OTCC approves Tesco Thailand acquisition (3-month) On November 9, the OTCC gave approval for CP Retail Development to Stock data acquire Tesco Thailand, with conditions that are now being reviewed. The Last close (Nov 9) (Bt) 27.50 acquisition of Tesco Asia Group is expected to be completed in late 4Q20F. 12-m target price (Bt) 38.00 Mkt cap (Btbn) 236.81 We have subtracted 3% from CPF’s earnings in 2021F to incorporate the Mkt cap (US$mn) 7,745 deal on the assumption interest expenses will outpace earnings from Tesco, not yet factoring in the currently lower interest rate and potential Beta M synergy. CPF shares have underperformed the SET by 6% in 4Q20TD. The Mkt cap (%) SET 1.71 Sector % SET 0.60 green light will help to lift share price overhang. Outperform maintained. Shares issued (mn) 8,611 Tesco Asia deal recap. On March 9, CP Retail Development Co. Ltd announced Par value (Bt) 1.00 12-m high / low (Bt) 35.3 / 18.7 that it will purchase Tesco Asia (Tesco Thailand and Tesco Malaysia) for US$10.6bn Avg. daily 6m (US$mn) 40.76 (Bt338bn). This consists of US$7.5bn investment in equity through C.P. Retail Foreign limit / actual (%) 40 / 29 Holding Co. Ltd and US$3.1bn debt funding. Of the total stake held by C.P. Retail Free float (%) 45.7 Dividend policy (%) ~ 50

Holding Co. Ltd, 20% will be taken by CPF (US$1.5bn or Bt48bn), 40% by CPALL and

40% by CP Holding Co. Ltd. Price performance

OTCC okays acquisition of Tesco Thailand. On Nov 9, CP Retail Development Co. 45 (Bt) 40 Ltd. received a letter from the Office of Trade Competition Commission (OTCC) 35 giving its approval (with conditions) for its acquisition of Tesco Thailand. Based on 30 25 news reports, OTCC imposed seven conditions for CP Retail Development Co. Ltd. 20 to mitigate the market impact post-merger. Key conditions include a ban on 15 10 CPF — Stock Price entering deals to merge with any other modern trade retailers for three years 5 CPF — Rel. to SET (rebased) (excluding e-commerce), maintain existing contracts with suppliers for at least 0 two years, increase the sales portion of products from SMEs by at least 10% each Feb-19 Feb-20 Nov-18 Aug-19 Nov-19 Aug-20 Nov-20 May-19 May-20 year for five years. Source: SET, SCBS Investment Research

Comment. Next step. CP Retail Development Co. Ltd can take up to 60 days to Share performance review the conditions from OTCC. It is also waiting for the approval of Malaysia’s (%) 1M 3M 12M Ministry of Domestic Trade and Consumer Affairs for the acquisition of Tesco Absolute 0.0 (16.7) 3.8 Relative to SET (1.5) (14.3) 32.2 Malaysia. If the conditions in Thailand are accepted and the deal in Malaysia is Source: SET, SCBS Investment Research approved, the acquisition of Tesco Asia will be done in late 4Q20F. Earnings impact. We have deducted 3% from CPF’s 2021 earnings as we conservatively assume interest expenses for funding the deal (4.5% p.a. via blending all funding costs in THB and US$ plus advisory and hedging costs) will exceed the earnings contributed by Tesco. We have not yet included the recent reduction in market interest rate nor any potential business synergy. The 1-year LIBOR and MLR has come down 50- 60bps since the announcement of the deal in March and every 50bps drop in funding costs below our assumption would raise CPF earnings by 1%. After CPALL acquired MAKRO in June 2013, sales from CPF to MAKRO jumped to Bt10bn in 2019 from Bt400mn in 2013, while CPF’s sales to Tesco Thailand is below Bt1bn p.a. now. After this transaction, CPF’s net DE will remain below its debt covenant of 2.0x.

Forecasts and valuation Analyst Year to 31 Dec Unit 2018 2019 2020F 2021F 2022F Sirima Dissara, CFA Revenue (Btmn) 541,937 532,573 582,438 587,780 591,187 Fundamental Investment EBITDA (Btmn) 40,210 50,535 71,867 70,565 69,334 Analyst on Securities Core profit (Btmn) 7,321 14,773 21,736 22,759 23,989 Reported profit (Btmn) 15,532 18,456 22,963 22,759 23,989 (66-2) 949-1004 Core EPS (Bt) 0.82 1.73 2.58 2.71 2.86 [email protected] DPS (Bt) 0.65 0.70 0.82 0.82 0.85 P/E, core (x) 33.5 15.9 10.6 10.2 9.6 EPS growth, core (%) 4.1 110.9 49.1 4.8 5.5 P/BV, core (x) 1.0 1.0 1.0 0.9 0.8 ROE (%) 3.3 6.8 9.6 9.4 9.2 Dividend yield (%) 2.4 2.5 3.0 3.0 3.1 FCF yield (x) (5.6) 6.2 (15.1) 7.3 8.2 EV/EBIT (x) 29.3 19.1 11.7 12.0 12.2 EBIT growth, core (%) 36.6 54.5 75.6 (3.9) (3.9) EV/CE (x) 1.6 1.7 2.1 2.0 1.9 ROCE (%) 2.2 5.5 11.5 10.7 10.1 EV/EBITDA (x) 13.0 10.4 7.9 7.9 7.9 EBITDA growth (%) 17.3 25.7 42.2 (1.8) (1.7)

Source: SCBS Investment Research See the end of this report for disclaimer 1

Charoen Pokphand Foods PLC

Value proposition Charoen Pokphand Foods (CPF) is one of the world’s recognized leaders in animal feed manufacturing, swine production and the integrated shrimp business. It has a diversified portfolio with operations and investment in 17 countries and exports to more than 30 countries. CPF operates an integrated agro- industrial and food business including swine, broilers, layers, ducks, shrimp and fish. The integrated food process utilizes advanced production technology, production meets international standards, is chemical-free and is systematically traceable throughout the whole food chain. Business outlook In 4Q20TD, swine price in Vietnam is VND77,000/kg (+18% YoY but -4% QoQ) and local swine and broiler prices are Bt80/kg (+33% YoY but flat QoQ) and Bt32/kg (-9% YoY and -5% QoQ). Swine prices rose YoY from tight supply, but prices dropped slightly QoQ from weak demand during the Vegetarian Festival in October. In September, corn and imported soybean meal prices turned to rise for the first time in two years, growing 4-6% YoY, as heavy rains delayed the corn harvest in Thailand and storms affected soybean harvests in the US. The impact on CPF has been limited so far. First, it keeps 3-4 months of inventory, implying no effect on actual feed costs (60% to total costs) for the rest of the year. Second, it can adjust feed formula to some extent to use other, cheaper, raw materials as substitutes for corn and soybean meal. The risk is changes in weather: if weather continues poor, it may affect actual feed costs in 2021. In 2021, we expect swine price in Vietnam to stay higher than historical average, as a sharp reduction of pig supply after the arrival of African Swine Fever (ASF) in February 2019 and higher investment costs for a biosecurity system to prevent disease means bringing pig supply back up for small players (60-70% of swine farms in Vietnam) will take time. We expect local swine price to be higher YoY, as more border trade in response to record-high swine prices in neighboring countries where pig supply has been hit by ASF, will keep local swine price high. We expect local broiler prices to rise YoY, thanks to robust local swine price, a wide gap between local swine and broiler prices (substitute product) and gradually better export demand. On Oct 27, CPF’s shareholders approved the purchase of a swine business in China in exchange for 65% of new shares in its feed business in China. CPF expects this deal to complete within late 4Q20F. Including this deal, CPF estimates a rise in its LTM (last 12 months) core profit of 11% (excluding gains on biological assets and a Bt2.6bn one-off gain from the change in fair value in investment). Based on Bloomberg, swine price in China was about CNY30/kg in LTM and CNY36/kg in September. We have not yet factored earnings from this deal into our projection, waiting for the completion of the deal and the movement of swine price in China.

Bullish views Bearish views 1. Continued high swine price in Vietnam and China from the 1. Fall in swine price in Vietnam and China from current historic slow return in pig supply at small farms after ASF. highs from huge supply additions 2. Continued low feed costs from low global meat production on 2. Feed costs to turn up as there is a 70% chance for a La Nina the slow return in pig supply after the spread of ASF. condition, based on NOAA data, until early 2021F

Key catalysts Factor Event Impact Comment Near-term earnings 3Q20F earnings momentum Positive QoQ and YoY We expect 3Q20F earnings to rise QoQ outlook from seasonality and YoY from better swine prices in Vietnam and Thailand. Completion of the Earnings upside in 4Q20F (one-off Positive Upon the completion of the acquisition, acquisition of a swine gain) and 2021F (core earnings CPF will record a Bt2.6bn one-off gain from business in China in accretive) the change in fair value in investment in 4Q20F 4Q20F. Going by information from CPF, including this deal (based on swine price at about CNY30/kg in LTM vs CNY36/kg in September) by our estimates, its 2021F core profit will rise by 9%. We have not yet factored earnings upside into our projection, waiting for the deal to wrap up and the movement of swine price in China.

Sensitivity analysis Factor Earnings impact TP impact 10% rise in revenue in CPP 7% Bt2/sh.

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Charoen Pokphand Foods PLC

Financial statement

Profit and Loss Statement FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Total revenue (Btmn) 421,355 464,465 501,507 541,937 532,573 582,438 587,780 591,187 Cost of goods sold (Btmn) (363,287) (391,822) (441,422) (476,228) (455,325) (480,681) (486,703) (490,994) Gross profit (Btmn) 58,068 72,643 60,086 65,709 77,248 101,757 101,077 100,193 SG&A (Btmn) (46,889) (45,473) (50,311) (52,049) (53,951) (58,098) (59,366) (60,301) Other income (Btmn) 2,725 3,192 3,261 4,142 4,202 4,620 4,663 4,690 Interest expense (Btmn) (9,614) (10,601) (11,743) (11,703) (13,785) (16,603) (17,005) (16,642) Pre-tax profit (Btmn) 4,290 19,760 1,292 6,099 13,714 31,677 29,370 27,940 Corporate tax (Btmn) (1,964) (5,542) (159) (2,762) (3,828) (8,870) (8,223) (7,823) Equity a/c profits (Btmn) 5,221 6,512 7,983 8,343 8,893 9,377 11,212 12,652 Minority interests (Btmn) (4,879) (6,566) (2,514) (4,359) (4,007) (10,448) (9,599) (8,780) Core profit (Btmn) 2,667 14,166 6,603 7,321 14,773 21,736 22,759 23,989 Extra-ordinary items (Btmn) 8,391 537 8,657 8,211 3,683 1,227 0 0 Net Profit (Btmn) 11,059 14,703 15,259 15,532 18,456 22,963 22,759 23,989 EBITDA (Btmn) 29,750 48,870 34,284 40,210 50,535 71,867 70,565 69,334 Core EPS (Bt) (Btmn) 0.36 1.92 0.79 0.82 1.73 2.58 2.71 2.86 Net EPS (Bt) (Bt) 1.50 1.99 1.91 1.82 2.18 2.73 2.71 2.86 DPS (Bt) (Bt) 0.75 0.95 0.75 0.65 0.70 0.82 0.82 0.85

Balance Sheet FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Total current assets (Btmn) 159,993 166,369 164,447 185,543 178,646 188,608 190,466 193,333 Total fixed assets (Btmn) 334,269 415,810 429,050 442,548 455,405 512,191 518,272 523,700 Total assets (Btmn) 494,263 582,179 593,497 628,091 634,051 700,799 708,739 717,033 Total loans (Btmn) 258,151 312,728 288,710 330,294 333,902 377,847 368,821 359,221 Total current liabilities (Btmn) 186,291 190,499 190,618 182,212 197,711 208,255 192,037 197,810 Total long-term liabilities (Btmn) 134,247 197,974 176,237 227,220 217,467 257,257 265,367 250,612 Total liabilities (Btmn) 320,538 388,473 366,855 409,433 415,178 465,512 457,404 448,422 Paid-up capital (Btmn) 7,743 7,743 8,611 8,611 8,611 8,611 8,611 8,611 Total equity (Btmn) 173,725 193,706 226,642 218,658 218,872 235,287 251,334 268,611 BVPS (Bt) (Bt) 23.51 26.22 29.35 26.71 26.74 28.75 30.71 32.82

Cash Flow Statement FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Core Profit (Btmn) 2,667 14,166 6,603 7,321 14,773 21,736 22,759 23,989 Depreciation and amortization (Btmn) 15,846 18,508 21,249 22,407 23,036 23,588 24,190 24,753 Operating cash flow (Btmn) 20,862 31,231 17,256 15,294 40,609 46,389 46,728 48,572 Investing cash flow (Btmn) (51,868) (62,784) (22,482) (27,880) (26,648) (80,374) (30,272) (30,180) Financing cash flow (Btmn) 30,755 29,618 (2,517) 22,029 (12,035) 37,397 (15,738) (16,312) Net cash flow (Btmn) (251) (1,934) (7,744) 9,443 1,927 3,412 719 2,080

Key Financial Ratios FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Gross margin (%) 13.8 15.6 12.0 12.1 14.5 17.5 17.2 16.9 Operating margin (%) 2.7 5.8 1.9 2.5 4.4 7.5 7.1 6.7 EBITDA margin (%) 7.1 10.5 6.8 7.4 9.5 12.3 12.0 11.7 EBIT margin (%) 3.3 6.5 2.6 3.3 5.2 8.3 7.9 7.5 Net profit margin (%) 2.6 3.2 3.0 2.9 3.5 3.9 3.9 4.1 ROE (%) 1.6 7.7 3.1 3.3 6.8 9.6 9.4 9.2 ROA (%) 0.6 2.6 1.1 1.2 2.3 3.3 3.2 3.4 Net D/E (x) 1.2 1.4 1.2 1.4 1.4 1.4 1.3 1.2 Interest coverage (x) 3.1 4.6 2.9 3.4 3.7 4.3 4.1 4.2 Debt service coverage (x) 0.2 0.3 0.2 0.3 0.3 0.4 0.5 0.5 Payout Ratio (%) 50.1 47.7 39.3 35.6 32.1 30.0 30.3 29.7

Main Assumptions FY December 31 Unit 2015 2016 2017 2018 2019 2020F 2021F 2022F Total sales growth (%) (1.1) 10.2 8.0 8.1 (1.7) 9.4 0.9 0.6 GPM from Thai-livestock (%) 12.7 15.3 11.4 6.4 12.1 14.2 15.0 15.0 GPM from Thai-aquatic (%) 6.0 12.3 10.2 7.8 7.5 11.2 12.0 13.0 GPM from CPP HK (%) 17.6 17.7 10.8 15.5 17.6 23.0 21.5 21.0 GPM from other overseas (%) 9.7 13.5 14.7 13.7 13.0 12.0 13.0 13.0 FX (Bt/US$1) 34.2 35.3 33.9 32.3 31.0 31.8 31.8 31.8

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Charoen Pokphand Foods PLC

Financial statement

Profit and Loss Statement FY December 31 Unit 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Total revenue (Btmn) 141,393 143,676 125,286 133,896 132,597 140,794 138,135 143,805 Cost of goods sold (Btmn) (121,783) (125,566) (107,614) (114,340) (114,660) (118,711) (112,802) (117,741) Gross profit (Btmn) 19,610 18,110 17,672 19,557 17,937 22,083 25,333 26,064 SG&A (Btmn) (12,671) (14,252) (12,279) (12,917) (13,454) (15,302) (13,945) (13,626) Other income (Btmn) 795 1,785 843 818 962 1,579 902 912 Interest expense (Btmn) (2,746) (3,340) (3,414) (3,467) (3,380) (3,524) (3,665) (4,491) Pre-tax profit (Btmn) 4,988 2,303 2,823 3,991 2,065 4,835 8,625 8,859 Corporate tax (Btmn) (1,362) (1,160) (270) (683) (692) (2,183) (1,823) (2,777) Equity a/c profits (Btmn) 2,096 2,089 2,348 1,869 2,260 2,415 2,680 1,583 Minority interests (Btmn) (1,892) (1,551) (1,625) (1,127) (408) (847) (3,040) (2,793) Core profit (Btmn) 3,830 1,681 3,277 4,050 3,226 4,220 6,441 4,872 Extra-ordinary items (Btmn) 1,082 (4) 1,002 54 2,836 (210) (330) 1,157 Net Profit (Btmn) 4,912 1,677 4,280 4,104 6,062 4,010 6,111 6,029 EBITDA (Btmn) 13,404 11,400 11,843 12,942 11,232 14,518 19,158 20,240 Core EPS (Bt) (Btmn) 0.45 0.19 0.38 0.48 0.38 0.50 0.77 0.58 Net EPS (Bt) (Bt) 0.58 0.19 0.50 0.48 0.72 0.47 0.73 0.72

Balance Sheet FY December 31 Unit 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Total current assets (Btmn) 179,545 185,543 185,894 204,501 185,103 178,646 233,785 242,065 Total fixed assets (Btmn) 438,399 442,548 443,632 435,431 441,406 455,405 521,467 509,254 Total assets (Btmn) 617,944 628,091 629,526 639,932 626,509 634,051 755,252 751,319 Total loans (Btmn) 322,484 330,294 329,009 340,451 329,951 333,902 419,118 427,267 Total current liabilities (Btmn) 189,203 182,212 186,485 195,884 193,288 197,711 259,632 237,701 Total long-term liabilities (Btmn) 210,333 227,220 220,858 227,269 217,457 217,467 249,914 274,209 Total liabilities (Btmn) 399,536 409,433 407,343 423,154 410,745 415,178 509,547 511,910 Paid-up capital (Btmn) 91,373 93,008 96,694 98,400 101,561 104,508 107,519 110,270 Total equity (Btmn) 218,408 218,658 222,183 216,778 215,764 218,872 245,706 239,409 BVPS (Bt) (Bt) 26.68 26.71 27.15 26.48 26.36 26.74 30.02 29.30

Cash Flow Statement FY December 31 Unit 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Core Profit (Btmn) 4,912 1,677 4,280 4,104 6,062 4,010 6,111 6,029 Depreciation and amortization (Btmn) 5,670 5,758 5,606 5,484 5,787 6,160 6,868 6,890 Operating cash flow (Btmn) 10,967 4,807 6,533 8,913 11,270 13,892 12,765 10,195 Investing cash flow (Btmn) (7,392) (5,552) (2,257) 2,256 (8,420) (18,227) (6,813) (311) Financing cash flow (Btmn) (1,888) 2,712 (5,031) 8,203 (15,301) 94 40,850 2,308 Net cash flow (Btmn) 1,687 1,967 (755) 19,372 (12,451) (4,240) 46,802 12,192

Key Financial Ratios FY December 31 Unit 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Gross margin (%) 13.9 12.6 14.1 14.6 13.5 15.7 18.3 18.1 Operating margin (%) 4.9 2.7 4.3 5.0 3.4 4.8 8.2 8.6 EBITDA margin (%) 9.5 7.9 9.5 9.7 8.5 10.3 13.9 14.1 EBIT margin (%) 5.5 3.9 5.0 5.6 4.1 5.9 8.9 9.3 Net profit margin (%) 3.5 1.2 3.4 3.1 4.6 2.8 4.4 4.2 ROE (%) 6.8 3.1 5.9 7.4 6.0 7.8 11.1 8.0 ROA (%) 2.5 1.1 2.1 2.6 2.0 2.7 3.7 2.6 Net D/E (x) 1.3 1.4 1.3 1.3 1.4 1.4 1.4 1.4 Interest coverage (x) 4.9 3.4 3.5 3.7 3.3 4.1 5.2 4.5 Debt service coverage (x) 0.4 0.3 0.3 0.4 0.3 0.4 0.4 0.4

Key statistics FY December 31 Unit 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Total sales growth (%) 11.8 11.0 4.0 (1.8) (6.2) (2.0) 10.3 7.4 GPM from Thai-livestock (%) 7.7 6.8 10.7 12.6 14.1 11.0 15.4 13.4 GPM from Thai-aquatic (%) 10.0 6.6 7.8 6.6 10.8 5.0 10.6 16.3 GPM from CPP HK (%) 18.4 16.5 18.2 14.7 13.8 22.9 24.6 22.6 GPM from other overseas (%) 13.7 13.9 12.8 15.5 12.9 10.6 11.7 14.5 FX (Bt/US$1) 32.9 32.8 31.6 31.6 30.7 30.3 31.3 31.9

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Charoen Pokphand Foods PLC

Appendix Figure 1: Swine price in Vietnam jumped 109% YoY in Figure 2: Swine price in China surged post the spread 3Q20, after the spread of ASF in Feb 2019 of ASF in August 2018

100,000 (VND/kg) 50.0 (CNY/kg) Swine price in Vietnam Swine price in China +61% YoY 90,000 45.0 80,218 76,674 40.0 35 36 37 35 80,000 76,625 74,360 32 +66% YoY 35.0 70,000 63,899 30.0 23 22 60,000 +109% YoY 25.0 +62% YoY 50,69349,241 20.0 15 50,000 42,407 46,503 13 14 14 14 13 46,138 15.0 11 40,000 45,903 30,895 10.0 38,422 42,903 30,000 35,726 5.0 28,650 20,000 0.0 2016 2017 2018 2019 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 2016 2017 2018 2019 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 2020TD 2020TD 3Q20TD Source: Industry sources and SCBS Investment Research Source: Bloomberg and SCBS Investment Research

Figure 3: In 3Q20, local swine price jumped YoY and Figure 4: Feedstock prices: Corn price rose slightly YoY, QoQ, while local broiler price rose QoQ but fell YoY while soybean meal price was stable YoY in 3Q20

Broiler price Swine price 30 100 (Bt/kg) (Bt/kg) Corn Soybean meal (import) +22% YoY +8% YoY 90 80 25 -1% YoY -3% YoY 80 73 74 72 74 70 69 20 66 68 16.5 17.1 70 63 65 16.016.2 15.5 15.416.1 60 60 58 59 14.614.514.214.013.714.014.0 14.313.9 60 15 47 50 10 -7% YoY -6% YoY 10.6 40 9.9 9.0 10.0 9.6 9.0 9.2 8.9 9.3 9.9 9.2 8.9 5 8.6 8.9 8.6 8.2 30 36 36 35 35 36 37 35 +2% YoY -2% YoY 32 32 33 33 34 31.5 34 33 33 20 0 2016 2017 2018 2019 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 2016 2017 2018 2019 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 2020TD 2020TD Source: Industry sources and SCBS Investment Research Source: Industry sources and SCBS Investment Research

Figure 5: CPF’s sales breakdown by production base Figure 6: CPF’s sales breakdown by market base in in 2019 2019 Philliphines, Others, 5% Cambodia, Philliphines, Cambodia, 2% Europe, 2% 2% 2% Others, 5% 2% Russia, 3% Russia, 3% Thailand, USA, 3% India, 3% Thailand, 33% 27% India, 3% Japan, 4% Taiwan, 4% USA, 4% UK, 4% Taiwan, 4% UK, 4% Vietnam, 16% Vietnam, China, 24% 16% China, 24%

Source: SCBS Investment Research Source: SCBS Investment Research

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Charoen Pokphand Foods PLC

Figure 7: The shareholding structure of pre and post transaction from acquisition of a swine farm business in China within 4Q20F

Source: Company data and SCBS Investment Research

Figure 8: Valuation summary (price as of Nov 9, 2020)

Rating Price Target ETR P/E (x) EPS growth (%) P/BV (x) ROE (%) Div. Yield (%) EV/EBITDA (x) (Bt/Sh) (Bt/Sh) (%) 19A 20F 21F 19A 20F 21F 19A 20F 21F 19A 20F 21F 19A 20F 21F 19A 20F 21F CPF Outperform 27.50 38.0 41.2 15.9 10.6 10.2 111 49 5 1.0 1.0 0.9 7 10 9 2.5 3.0 3.0 10.4 7.9 7.9 GFPT Outperform 11.50 16.0 40.9 11.5 12.7 11.1 10 (10) 15 1.1 1.0 0.9 10 8 9 1.7 1.7 1.7 6.3 6.8 6.2 TU Neutral 15.90 18.0 17.5 14.5 12.3 12.1 30 18 1 1.5 1.4 1.3 11 12 11 3.0 4.3 4.3 11.4 10.1 10.5 Average 14.0 11.9 11.1 50 19 7 1.2 1.1 1.0 9 10 10 2.4 3.0 3.0 9.4 8.3 8.2 Source: SCBS Investment Research

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Charoen Pokphand Foods PLC

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Any opinions, news, research, analyses, prices, statements, forecasts, projections and/or other information contained in this document (the “Information”) is provided as general information purposes only, and shall not be construed as individualized recommendation of an offer to buy or sell or the solicitation of an offer to buy or sell any securities. SCBS and/or its directors, officers and employees shall not be liable for any direct, indirect, incidental, special or consequential loss or damage, resulting from the use of or reliance on the Information, including without limitation to, damages for loss of profits. The investors shall use the Information in association with other information and opinion, including their own judgment in making investment decision. The Information is obtained from sources believed to be reliable, and SCBS cannot guarantee the accuracy, completeness and/or correctness of the Information. This document is prepared by SCB Securities Company Limited (“SCBS”) which is wholly-owned by The Siam Commercial Bank Public Company Limited (“SCB”). SCB has acted as Financial Advisor of Charoen Pokphand Group Company Limited. and its affiliates including CP All Public Company Limited. and Charoen Pokphand Foods Public Company Limited. Any opinions, news, research, analyses, prices, statements, forecasts, projections and/or other information contained in this document (the “Information”) is provided as general information purposes only, and shall not be construed as individualized recommendation of an offer to buy or sell or the solicitation of an offer to buy or sell any securities. SCBS and/or its directors, officers and employees shall not be liable for any direct, indirect, incidental, special or consequential loss or damage, resulting from the use of or reliance on the Information, including without limitation to, damages for loss of profits. The investors shall use the Information in association with other information and opinion, including their own judgment in making investment decision. The Information is obtained from sources believed to be reliable, and SCBS cannot guarantee the accuracy, completeness and/or correctness of the Information. This document is prepared by SCB Securities Company Limited (“SCBS”) which is wholly-owned by The Siam Commercial Bank Public Company Limited (“SCB”). SCB has acted as Financial Advisor, Lead Arranger of Global Power Synergy Public Company Limited. Any opinions, news, research, analyses, prices, statements, forecasts, projections and/or other information contained in this document (the “Information”) is provided as general information purposes only, and shall not be construed as individualized recommendation of an offer to buy or sell or the solicitation of an offer to buy or sell any securities. SCBS and/or its directors, officers and employees shall not be liable for any direct, indirect, incidental, special or consequential loss or damage, resulting from the use of or reliance on the Information, including without limitation to, damages for loss of profits. The investors shall use the Information in association with other information and opinion, including their own judgment in making investment decision. The Information is obtained from sources believed to be reliable, and SCBS cannot guarantee the accuracy, completeness and/or correctness of the Information. This document is prepared by SCB Securities Company Limited (“SCBS”) which is wholly-owned by The Siam Commercial Bank Public Company Limited (“SCB”). SCB Asset Management Company Limited (“SCBAM”) which is wholly-owned by The Siam Commercial Bank Public Company Limited (“SCB”). SCB has acted as Financial Advisor of Digital Telecommunications Infrastructure Fund. SCBAM has acted as Fund Manager of Digital Telecommunications Infrastructure Fund. Any opinions, news, research, analyses, prices, statements, forecasts, projections and/or other information contained in this document (the “Information”) is provided as general information purposes only, and shall not be construed as individualized recommendation of an offer to buy or sell or the solicitation of an offer to buy or sell any securities. SCBS and/or its directors, officers and employees shall not be liable for any direct, indirect, incidental, special or consequential loss or damage, resulting from the use of or reliance on the Information, including without limitation to, damages for loss of profits. The investors shall use the Information in association with other information and opinion, including their own judgment in making investment decision. The Information is obtained from sources believed to be reliable, and SCBS cannot guarantee the accuracy, completeness and/or correctness of the Information. SCBS reserves the right to modify the Information from time to time without notice and in its sole discretion. This document is delivered to intended recipient(s) only and is not permitted to reproduce, retransmit, disseminate, sell, distribute, republish, circulate or commercially exploit the Information in any manner without the prior written consent of SCBS. Futures and Options trading carry a high level of risk with the potential for substantial losses, and are not suitable for all persons. Before deciding to trade Futures and Options, you should carefully consider your financial position, investment objectives, level of experience, and risk appetite if Futures and Options trading are appropriate. The possibility exists that you could sustain a loss of some or all of your initial investment. You should be aware of all the risks associated with Futures and Options trading, and you are advised to rely on your own judgment while making investment decision and/or should seek advice from professional investment advisor if you have any doubts. This document is delivered to intended recipient(s) only and is not permitted to reproduce, retransmit, disseminate, sell, distribute, republish, circulate or commercially exploit the Information in any manner without the prior written consent of SCBS. Copyright©2012 SCB Securities Company Limited. All rights reserved.

Tue, Nov 10, 2020 7

Charoen Pokphand Foods PLC

CG Rating 2019 Companies with CG Rating Companies with Excellent CG Scoring AAV, ADVANC, AIRA, AKP, AKR, AMA, AMATA, AMATAV, ANAN, AOT, AP, ARROW, BAFS, BANPU, BAY, BCP, BCPG, BOL, BRR, BTS, BTW, BWG, CFRESH, CHEWA, CHO, CK, CKP, CM, CNT, COL, COMAN, CPALL, CPF, CPI, CPN, CSS, DELTA, DEMCO, DRT, DTAC, DTC, EA, EASTW, ECF, EGCO, GBX, GC, GCAP, GEL, GFPT, GGC, GOLD, GPSC, GRAMMY, GUNKUL, HANA, HARN, HMPRO, ICC, ICHI, III, ILINK, INTUCH, IRPC, IVL, JKN, JSP, K, KBANK, KCE, KKP, KSL, KTB, KTC, KTIS, LH, LHFG, LIT, LPN, MAKRO, MALEE, MBK, MBKET, MC, MCOT, MFEC, MINT, MONO*, MTC, NCH, NCL, NKI, NSI, NVD, NYT, OISHI, OTO, PAP, PCSGH, PDJ, PG, PHOL, PJW, PLANB, PLANET, PORT, PPS, PR9, PREB, PRG, PRM, PSH, PSL, PTG, PTT, PTTEP, PTTGC, PYLON, Q-CON, QH, QTC, RATCH, ROBINS, RS, S, S & J, SABINA, SAMART, SAMTEL, SAT, SC, SCB, SCC, SCCC, SCN, SDC, SEAFCO, SEAOIL, SE-ED, SELIC, SENA, SIS, SITHAI, SNC, SORKON, SPALI, SPI, SPRC, SSSC, STA, STEC, SVI, SYNTEC, TASCO, TCAP, THAI, THANA, THANI, THCOM, THIP, THREL, TIP, TISCO, TK, TKT, TMB, TMILL, TNDT, TOA, TOP, TRC, TRU, TRUE, TSC, TSR, TSTH, TTA, TTCL, TTW, TU, TVD, TVO, U, UAC, UV, VGI, VIH, WACOAL, WAVE, WHA, WHAUP, WICE, WINNER Companies with Very Good CG Scoring 2S, ABM, ADB, AF, AGE, AH, AHC, AIT, ALLA, ALT, AMANAH, AMARIN, APCO, APCS, AQUA, ARIP, ASAP, ASIA, ASIAN, ASIMAR, ASK, ASN, ASP, ATP30, AUCT, AYUD, B, BA, BBL, BDMS, BEC, BEM, BFIT, BGC, BGRIM, BIZ, BJC, BJCHI, BLA, BPP, BROOK, CBG, CEN, CENTEL, CGH, CHG, CHOTI, CHOW, CI, CIMBT, CNS, COLOR, COM7, COTTO, CRD, CSC, CSP, DCC, DCON, DDD, DOD, EASON, ECL, EE, EPG, ERW, ESTAR, ETE, FLOYD, FN, FNS, FORTH, FPI, FPT, FSMART, FSS, FVC, GENCO, GJS, GL, GLOBAL, GLOW, GULF, HPT, HTC, HYDRO, ICN, IFS, INET, INSURE, IRC, IRCP, IT, ITD*, ITEL, J, JAS*, JCK, JCKH, JMART, JMT, JWD, KBS, KCAR, KGI, KIAT, KOOL, KWC, KWM, L&E, LALIN, LANNA, LDC, LHK, LOXLEY, LRH, LST, M, MACO, MAJOR, MBAX, MEGA, METCO, MFC, MK, MODERN, MOONG, MPG, MSC, MTI, NEP, NETBAY, NEX, NINE, NOBLE, NOK, NTV, NWR, OCC, OGC, ORI, OSP, PATO, PB, PDG, PDI, PL, PLAT, PM, PPP, PRECHA, PRIN, PRINC, PSTC, PT, QLT, RCL, RICHY, RML, RWI, S11, SAAM, SALEE, SAMCO, SANKO, SAPPE, SAWAD, SCG, SCI, SCP, SE, SFP, SIAM, SINGER, SIRI, SKE, SKR, SKY, SMIT, SMK, SMPC, SMT, SNP, SONIC, SPA, SPC, SPCG, SPVI, SR, SRICHA, SSC, SSF, SST, STANLY, STPI, SUC, SUN, SUSCO, SUTHA, SWC, SYMC, SYNEX, T, TACC, TAE, TAKUNI, TBSP, TCC, TCMC, TEAM, TEAMG, TFG, TFMAMA, THG, THRE, TIPCO, TITLE, TIW, TKN, TKS, TM, TMC, TMD, TMI, TMT, TNITY, TNL, TNP, TNR, TOG, TPA, TPAC, TPBI, TPCORP, TPOLY, TRITN, TRT, TSE, TSTE, TVI, TVT, TWP, TWPC, UBIS, UEC, UMI, UOBKH, UP, UPF, UPOIC, UT, UWC, VNT, WIIK, XO, YUASA, ZEN, ZMICO Companies with Good CG Scoring A, ABICO, ACAP*, AEC, AEONTS, AJ, ALUCON, AMC, APURE, AS, ASEFA, AU, B52, BCH, BEAUTY, BGT, BH, BIG, BLAND, BM, BR, BROCK, BSBM, BSM, BTNC, CCET, CCP, CGD, CHARAN, CHAYO, CITY, CMAN, CMC, CMO, CMR, CPL, CPT, CSR, CTW, CWT, D, DIMET, EKH, EMC, EPCO, ESSO, FE, FTE, GIFT, GLAND, GLOCON, GPI, GREEN, GTB, GYT, HTECH, HUMAN, IHL, INGRS, INOX, JTS, JUBILE, KASET, KCM, KKC, KWG, KYE, LEE, LPH, MATCH, MATI, M-CHAI, MCS, MDX, META, MGT, MJD, MM, MVP, NC, NDR, NER, NNCL, NPK, NUSA, OCEAN, PAF, PF, PICO, PIMO, PK, PLE, PMTA, POST, PPM, PROUD, PTL, RCI, RJH, ROJNA, RPC, RPH, SF, SGF, SGP, SKN, SLP, SMART, SOLAR, SPG, SQ, SSP, STI, SUPER, SVOA, TCCC, THE, THMUI, TIC, TIGER, TNH, TOPP, TPCH, TPIPP, TPLAS, TQM, TTI, TYCN, UTP, VCOM, VIBHA, VPO, WIN, WORK, WP, WPH, ZIGA Corporate Governance Report The material contained in this publication is for general information only and is not intended as advice on any of the matters discussed herein. Readers and others should perform their own independent analysis as to the accuracy or completeness or legality of such information. The Thai Institute of Directors, its officers, the authors and editor make no representation or warranty as to the accuracy, completeness or legality of any of the information contained herein. By accepting this document, each recipient agrees that the Thai Institute of Directors Association, its officers, the authors and editor shall not have any liability for any information contained in, or for any omission from, this publication. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that date. SCB Securities Company Limited does not conform nor certify the accuracy of such survey result. To recognize well performers, the list of companies attaining “Good”, “Very Good” and “Excellent” levels of recognition (Not including listed companies qualified in the "no announcement of the results" clause from 1 January 2018 to 25 October 2019) is publicized. * บรษิ ัทหรอกรรมการหรื อผื ูบร้ หารของบริ ษิ ัททมี ขี าวด่ านการก้ ํากับดแลกู จการิ เชน่ การกระทําผดเกิ ยวกี่ ับหลักทรัพย ์ การทุจรติ คอรร์ ัปชนั เป็ นตน้ ซงการใชึ ข้ อม้ ูล CGR ควรตระหนักถงึ ขาวด่ ังกลาวประกอบด่ วย้

Anti-corruption Progress Indicator Certified (ไดร้ บการรั บรองั ) 2S, ADVANC, AI, AIE, AIRA, AKP, AMA, AMANAH, AP, AQUA, ARROW, ASK, ASP, AYUD, B, BAFS, BANPU, BAY, BBL, BCH, BCP, BCPG, BGC, BGRIM, BJCHI, BKI, BLA, BPP, BROOK, BRR, BSBM, BTS, BWG, CEN, CENTEL, CFRESH, CGH, CHEWA, CHOTI, CHOW, CIG, CIMBT, CM, CMC, COL, COM7, CPALL, CPF, CPI, CPN, CSC, DCC, DELTA, DEMCO, DIMET, DRT, DTAC, DTC, EASTW, ECL, EGCO, FE, FNS, FPI, FPT, FSS, FTE, GBX, GC, GCAP, GEL, GFPT, GGC, GJS, GPSC, GSTEEL, GUNKUL, HANA, HARN, HMPRO, HTC, ICC, ICHI, IFS, INET, INSURE, INTUCH, IRPC, ITEL, IVL, K, KASET, KBANK, KBS, KCAR, KCE, KGI, KKP, KSL, KTB, KTC, KWC, L&E, LANNA, LHFG, LHK, LPN, LRH, M, MAKRO, MALEE, MBAX, MBK, MBKET, MC, MCOT, MFC, MFEC, MINT, MONO, MOONG, MPG, MSC, MTC, MTI, NBC, NEP, NINE, NKI, NMG, NNCL, NSI, NWR, OCC, OCEAN, OGC, ORI, PAP, PATO, PB, PCSGH, PDG, PDI, PDJ, PE, PG, PHOL, PL, PLANB, PLANET, PLAT, PM, PPP, PPPM, PPS, PREB, PRG, PRINC, PRM, PSH, PSL, PSTC, PT, PTG, PTT, PTTEP, PTTGC, PYLON, Q-CON, QH, QLT, QTC, RATCH, RML, RWI, S & J, SABINA, SAT, SC, SCB, SCC, SCCC, SCG, SCN, SEAOIL, SE-ED, SELIC, SENA, SGP, SIRI, SITHAI, SMIT, SMK, SMPC, SNC, SNP, SORKON, SPACK, SPC, SPI, SPRC, SRICHA, SSF, SSSC, SST, STA, SUSCO, SVI, SYNTEC, TAE, TAKUNI, TASCO, TBSP, TCAP, TCMC, TFG, TFI, TFMAMA, THANI, THCOM, THIP, THRE, THREL, TIP, TIPCO, TISCO, TKT, TMB, TMD, TMILL, TMT, TNITY, TNL, TNP, TNR, TOG, TOP, TPA, TPCORP, TPP, TRU, TRUE, TSC, TSTH, TTCL, TU, TVD, TVI, TVO, TWPC, U, UBIS, UEC, UKEM, UOBKH, UWC, VGI, VIH, VNT, WACOAL, WHA, WHAUP, WICE, WIIK, XO, ZEN Declared (ประกาศเจตนารมณ์) 7UP, ABICO, AF, ALT, AMARIN, AMATA, AMATAV, ANAN, APURE, B52, BKD, BM, BROCK, BUI, CHO, CI, COTTO, DDD, EA, EFORL, EP, ERW, ESTAR, ETE, EVER, FSMART, GPI, ILINK, IRC, J, JKN, JMART, JMT, JSP, JTS, KWG, LDC, MAJOR, META, NCL, NOBLE, NOK, PK, PLE, ROJNA, SAAM, SAPPE, SCI, SE, SHANG, SINGER, SKR, SPALI, SSP, STANLY, SUPER, SYNEX, THAI, TKS, TOPP, TRITN, TTA, UPF, UV, WIN, ZIGA N/A 3K-BAT, A, A5, AAV, ABM, ACAP, ACC, ACE, ACG, ADB, AEC, AEONTS, AFC, AGE, AH, AHC, AIT, AJ, AJA, AKR, ALL, ALLA, ALUCON, AMC, AOT, APCO, APCS, APEX, APP, AQ, ARIN, ARIP, AS, ASAP, ASEFA, ASIA, ASIAN, ASIMAR, ASN, ATP30, AU, AUCT, AWC, BA, BAM, BC, BCT, BDMS, BEAUTY, BEC, BEM, BFIT, BGT, BH, BIG, BIZ, BJC, BLAND, BLISS, BOL, BR, BSM, BTNC, BTW, CAZ, CBG, CCET, CCP, CGD, CHARAN, CHAYO, CHG, CITY, CK, CKP, CMAN, CMO, CMR, CNT, COLOR, COMAN, CPH, CPL, CPR, CPT, CPW, CRANE, CRC, CRD, CSP, CSR, CSS, CTW, CWT, D, DCON, DHOUSE, DOD, DOHOME, DTCI, DV8, EASON, ECF, EE, EKH, EMC, EPG, ESSO, ETC, F&D, FANCY, FLOYD, FMT, FN, FORTH, FVC, GENCO, GIFT, GL, GLAND, GLOBAL, GLOCON, GRAMMY, GRAND, GREEN, GSC, GTB, GULF, GYT, HFT, HPT, HTECH, HUMAN, HYDRO, ICN, IFEC, IHL, IIG, III, ILM, IMH, INGRS, INOX, INSET, IP, IRCP, IT, ITD, JAS, JCK, JCKH, JCT, JUBILE, JUTHA, JWD, KAMART, KC, KCM, KDH, KIAT, KK, KKC, KOOL, KTIS, KUMWEL, KUN, KWM, KYE, LALIN, LEE, LEO, LH, LIT, LOXLEY, LPH, LST, MACO, MANRIN, MATCH, MATI, MAX, M- CHAI, MCS, MDX, MEGA, METCO, MGT, MICRO, MIDA, MILL, MITSIB, MJD, MK, ML, MM, MODERN, MORE, MPIC, MVP, NC, NCAP, NCH, NDR, NER, NETBAY, NEW, NEWS, NEX, NFC, NPK, NRF, NTV, NUSA, NVD, NYT, OHTL, OISHI, OSP, OTO, PACE, PAE, PAF, PERM, PF, PICO, PIMO, PJW, PMTA, POLAR, POMPUI, PORT, POST, PPM, PR9, PRAKIT, PRAPAT, PRECHA, PRIME, PRIN, PRO, PROUD, PTL, RAM, RBF, RCI, RCL, RICHY, RJH, ROCK, ROH, RP, RPC, RPH, RS, RSP, S, S11, SABUY, SAFARI, SALEE, SAM, SAMART, SAMCO, SAMTEL, SANKO, SAUCE, SAWAD, SAWANG, SCGP, SCM, SCP, SDC, SEAFCO, SEG, SF, SFLEX, SFP, SFT, SGF, SHR, SIAM, SICT, SIMAT, SIS, SISB, SK, SKE, SKN, SKY, SLM, SLP, SMART, SMT, SO, SOLAR, SONIC, SPA, SPCG, SPG, SPVI, SQ, SR, SSC, STAR, STARK, STC, STEC, STGT, STHAI, STI, STPI, SUC, SUN, SUTHA, SVH, SVOA, SWC, SYMC, T, TACC, TAPAC, TC, TCC, TCCC, TCJ, TCOAT, TEAM, TEAMG, TGPRO, TH, THANA, THE, THG, THL, THMUI, TIGER, TITLE, TIW, TK, TKN, TM, TMC, TMI, TMW, TNDT, TNH, TNPC, TOA, TPAC, TPBI, TPCH, TPIPL, TPIPP, TPLAS, TPOLY, TPS, TQM, TR, TRC, TRT, TRUBB, TSE, TSF, TSI, TSR, TSTE, TTI, TTT, TTW, TVT, TWP, TWZ, TYCN, UAC, UMI, UMS, UNIQ, UP, UPA, UPOIC, UREKA, UT, UTP, UVAN, VARO, VCOM, VI, VIBHA, VL, VNG, VPO, VRANDA, W, WAVE, WG, WGE, WINNER, WORK, WORLD, WP, WPH, WR, YCI, YGG, YUASA, ZMICO Explanations Companies participating in Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) under Thai Institute of Directors (as of June 24, 2019) are categorised into: companies that have declared their intention to join CAC, and companies certified by CAC.

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