{"id":316721,"date":"2022-08-23T01:00:58","date_gmt":"2022-08-22T17:00:58","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=316721"},"modified":"2023-01-08T15:29:26","modified_gmt":"2023-01-08T07:29:26","slug":"consumer-play-dump-monde-buy-these-2-stocks-instead","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/consumer-play-dump-monde-buy-these-2-stocks-instead\/","title":{"rendered":"Consumer Play: Dump MONDE, buy these 2 stocks instead"},"content":{"rendered":"\n

Rising prices in the UK continue to strangle MONDE; prioritize URC and CNPF instead<\/strong><\/p>\n\n\n\n

Energy bills in the UK are set to rise to an equivalent of $4200 this year, further compounding the country\u2019s inflation dilemma which is forecasted to exceed 13% by year\u2019s end. In our view, this would further dampen the prospects for MONDE\u2019s meat alternatives (Quorn) business seeing as exorbitant price levels are most likely to further erode grocery retail demand which would affect the business\u2019 sales.<\/p>\n\n\n\n

Note that the meat alternative category in the UK is tied closely to the growth of the grocery market given that it is their main distribution format. Furthermore, while Quorn has been picking up momentum in terms of transitioning to QSR, this format so far accounts for around only 15% of Quorn revenues. Also, the high inflation numbers may provide headwinds for QSR demand as time goes on.<\/p>\n\n\n\n

Our View:<\/strong> Given these factors, in terms of FMCG and consumer staple players, we would instead focus on URC<\/strong> (Target Price: P160.00\/share) and CNPF<\/strong> (Target Price: P31.43\/share).<\/p>\n\n\n\n

Given that domestically MONDE would also be feeling the bite of tight sugar supplies, we believe that URC would be the more prudent option given the vertical integration that its BCF business has with its sugar milling operations which sells 40% of its sugar output to BCF. This would help keep costs amidst the tighter supply at a minimum. Although sugar sales to third parties are likely to decline volume-wise, the company notes that they have been compensating in terms of higher prices.<\/p>\n\n\n\n

For CNPF, we believe that the shelf-staple nature of its products should continue to be in high demand amidst high food prices. Aside from this, we also note that the long-term growth trajectory for its milk business continues to look promising as we project domestic milk consumption to grow by a CAGR of 3.4% until 2033. Demand for dairy in the country is also currently underserved by domestic production (only 1% of dairy requirements) which leaves much room for CNPF to continue to gain market share through its affordable pricing and expansion of its milk product portfolio.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s a commentary on an important issue or event affecting the stock market <\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-316721","post","type-post","status-publish","format-standard","hentry","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/316721","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=316721"}],"version-history":[{"count":2,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/316721\/revisions"}],"predecessor-version":[{"id":320506,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/316721\/revisions\/320506"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=316721"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=316721"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=316721"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}