C.P. Pokphand Co. Ltd (HK:0043) is involved in the animal feed industry, and the poultry and livestock industry in China and Vietnam.
The company is a subsidiary of Charoen Pokphand Group, which has very interesting subsidiaries such as C.P. All.
We think CP Pokphand is considerably undervalued, given its future earnings and its balance sheet. The outlook for the feed and livestock business is very favorable in China. CP Pokphand is well positioned to reap the rewards.
Although the expected growth is not so high, C.P. Pokphand will continue to deliver steady slow growth over the coming decades.
Animal feed market analysis
China continues to be a great consumer of animal protein products. Pork as well as poultry remain the favorite choices, because of their low cost. Retail Pork sales in China continue to increase at a fast pace.
China’s meat consumption is so high, that it continues to increase its imports. It is expected to continue growing.