{"id":322694,"date":"2023-04-13T12:59:47","date_gmt":"2023-04-13T04:59:47","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=322694"},"modified":"2023-05-05T01:54:25","modified_gmt":"2023-05-04T17:54:25","slug":"stock-in-focus-century-pacific-foods-inc-cnpf-13-apr-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-century-pacific-foods-inc-cnpf-13-apr-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Century Pacific Foods, Inc. (CNPF) – 13 Apr 2023 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>CNPF<\/td><\/tr>
Company Name<\/strong><\/td>Century Pacific Foods, Inc.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>13 Apr 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 28.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We trimmed our target price (TP) for CNPF from Php29.10 to Php28.00 based on our updated 2023 EPS forecast of Php1.61, wherein we applied the average of the stock\u2019s 2019 Price-Earnings (PE) ratio of 19.9x and our 2023F PE of 15.0x. <\/p>\n\n\n\n

Our revised TP implies a total potential return of 18.2%, which includes a 2023 dividend yield of 1.8%. Hence, we retain our BUY recommendation.<\/p>\n\n\n\n

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

4Q 2022 bore the brunt of higher input costs<\/strong><\/p>\n\n\n\n

CNPF\u2019s consolidated net sales for 2022 and 4Q 2022 rose 14% and 12%, respectively, to Php62.2 billion\/Php15.3 billion, respectively, driven by a 16%\/15% growth in the Branded business as consumer demand for staples and value for money goods remained resilient in an inflationary environment. Despite higher sales, CNPF recorded a staggering 130bps erosion in the 4Q 2022 due to higher locked-in costs, and higher freight rates in the OEM export business. This was cushioned by price increases and cost optimization measures which chopped down 2022 margin losses to only 20bps. 4Q22 net income managed to grow 5% to Php729.0 million, bringing 2022 core net income 20% higher to Php5.4 billion, better than our estimates and in line with Bloomberg consensus.<\/p>\n\n\n\n

Multi-layered portfolio apropos to various consumers<\/strong><\/p>\n\n\n\n

The Branded business primarily drives company-wide growth as the segment contributes 80% of the firm\u2019s total sales. Its CEN portfolio (Core, Emerging, New) strategy captures the overall market by penetrating the core values and price tiers common to a variety of consumers. Due to the unfavourable market conditions prevalent in 2022, the CEN products that drove growth were under the Value for Money and Mass Markets segment as consumers seek affordable food items.<\/p>\n\n\n\n

CNPF expectations<\/strong><\/p>\n\n\n\n

For 2023, CNPF expects to achieve a similar sales growth in 2022 around the low to mid-teens which will be driven by the core marine business, boosted by fishing\/production from 2Q23 onwards as the seasonal fishing ban will be ending by the end-1Q23, and emerging segments like the milk business which boasted more than 20% growth in FY22. CAPEX allocation of Php3-4.0 billion, which is greater than the historical spent, will be focused on expanding the canned and pet food businesses.<\/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>