MONDE IPO Analysis #3: Buy Stock if it Falls Below…

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Our Partner Broker’s Recommendation

Our sum-of-the-parts valuation on Monde Nissin Corp. (MONDE) yielded a Target Price of PHP xx.xx/share. At its indicative offer price of P13.50/share, MONDE is estimated to trade at P/E of 27.1x, a premium compared to the 23.8x P/E of comparable peer Universal Robina Corp. (URC).

With this, we recommend to buy MONDE below …

 

Our Partner Broker’s Analysis and Recommendation

 

Use of Proceeds

Net proceeds from the MONDE IPO will primarily be used for the expansion of both Asia Pacific (APAC) Branded Food Business (BFB) and Meat Alternatives, redemption of Arran convertible notes and repayment of bank loans.

Assuming its overallotment (OA) option is exercised and the original disbursement plan is implemented, we estimate allocation to be as follows – CAPEX (P26.5 Billion), Arran convertible note (P13.4 Billion) and loan repayment (P16.0 Billion).

 

Valuation

We valued MONDE using sum-of-the-parts (SOTP) method for its two business segments namely, APAC BFB and Meat Alternative.

For APAC BFB, we used a P/E multiple of 28.5x, in-line with the 5-year mean of its closest domestic peer, URC. For the Meat Alternative business, we used a 13.8x EV/EBITDA multiple based on the same valuation from MONDE’s acquisition of Quorn in 2015.

All in all, our derived Target Price is Pxx.xx/share and we would look to buy if the stock price falls…

 

 

Read these other Monde Nissin (MONDE) IPO Special Reports!

Monde Nissin (MONDE) IPO Analysis Special Report #1

MONDE IPO Analysis Special Report #2 (by AB Capital Securities)

 

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AP Securities (formerly Angping & Associates Securities)
AP Securities (formerly Angping & Associates Securities)

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