{"id":319977,"date":"2023-01-02T12:10:00","date_gmt":"2023-01-02T04:10:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=319977"},"modified":"2023-01-02T22:14:02","modified_gmt":"2023-01-02T14:14:02","slug":"stock-in-focus-emperador-inc-emi-2-jan-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-emperador-inc-emi-2-jan-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Emperador Inc. (EMI) – 2 Jan 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>EMI<\/td><\/tr>
Company Name<\/strong><\/td>Emperador Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>2 Jan 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 14.80<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We are maintaining our HOLD recommendation with a fair value Target Price of P14.80 per share<\/strong>. Based on our projections, EMI could grow its 2022 revenues by a double digit growth, while net income could remain flattish due to the still elevated production costs.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Latest earnings report<\/strong><\/p>\n\n\n\n

In the 3rd quarter (3Q) 2022, EMI saw an improvement in its sales amid the strong demand from both their brandy and whisky business lines. Its revenues grew by +12% year-on-year (y\/y) to P14.6 billion in 3Q 2022, albeit net income slid by -12% y\/y to P7.3 billion largely due from the higher input costs and promotional activities. To improve its earnings, the group continues to target and ride the premiumization trend, putting them in a better position among its peers. <\/p>\n\n\n\n

Aggressive expansion in international sales<\/strong><\/p>\n\n\n\n

Growth projections are looking bright for the company as it aggressively expand
their international sales. In fact, the company raised its capex by almost twofolds
for their whisky business as it aims to derive 50% of its topline from its foreign units
by 2025.<\/p>\n\n\n\n

The brandy segment remain to contribute the bigger share in the firm\u2019s revenue mix which accounts for about 63% of its total sales, while the remaining 37% comes from the whisky category. In 9M22, the brandy segment\u2019s topline went up by +8% y\/y to P26.9 billion amid the loosening covid-19 restrictions in its international stores. <\/p>\n\n\n\n

The brands did see positive market growth in countries like the Philippines, Spain, Mexico, and North America. Meanwhile, the whisky segment\u2019s topline accelerated by +17% y\/y to P15.8 billion, benefitting from the strong demand in Europe, Asia Pacific, and North America amid the easing lockdown protocols and the lifting of the travel bans as well.<\/p>\n\n\n\n

Growth opportunities<\/strong><\/p>\n\n\n\n

Despite the macro challenges, the group intends to aggressively expand globally, increasing their capex by twofolds which will be used for their whisky unit outside the Philippines. Further, the firm continues to target and ride the premiumization trend, putting them in a better position alongside its peers.<\/p>\n\n\n\n

In 2H 2022, the firm also got listed on the main board of the SGX, paving the way for a stronger growth opportunities as it provides more exposure to international investors. This is a huge milestone for EMI as it increases its visibility, building brand awareness to the foreign market.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>