{"id":324288,"date":"2023-08-04T01:04:48","date_gmt":"2023-08-03T17:04:48","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324288"},"modified":"2023-08-04T01:06:31","modified_gmt":"2023-08-03T17:06:31","slug":"stock-in-focus-aboitiz-equity-ventures-aev-4-aug-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-aboitiz-equity-ventures-aev-4-aug-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Aboitiz Equity Ventures (AEV) – 4 Aug 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>AEV<\/td><\/tr>
Company Name<\/strong><\/td>Aboitiz Equity Ventures<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>4 Aug 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 58.70<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The Coca-Cola Philippines deal is still pending approvals from the boards of all concerned parties, as well as subject to due diligence. Expected closing is towards the end of the year. With the negative performance of Coca-Cola PH to be combined by the overall poor performance of Pilmico, it remains to be seen if this will be a positive addition to the Aboitiz Group. And while the group touts this to create synergies with its existing food business, it may be a stretch to connect flour, meat and eggs with fizzy drinks.<\/p>\n\n\n\n

We have a Hold rating on AEV with Target Price of P58.70 per share.<\/p>\n\n\n\n

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

AEV looks to joint acquisition of Coca-Cola PH<\/strong><\/p>\n\n\n\n

The Aboitiz group has entered a non-binding letter of intent to jointly acquire Coca-Cola Beverage Philippines with Coca-Cola Europacific Partners PLC (CCEPP) for $1.8-Bn. CCEPP is the resulting company from the merger of the three main bottling companies of The Coca-Cola Company in Western Europe. It later swallowed Coca Cola Amatil, the Coca-Cola bottling company serving Australia, New Zealand, and western Pacific islands. The acquisition will be split 60-40 between CCEPP and AEV respectively.<\/p>\n\n\n\n

Doubling down on food<\/strong><\/p>\n\n\n\n

This will be AEV\u2019s first venture into the branded food industry, as its food subsidiary Pilmico focuses mainly on flour, meat, eggs, and various animal foods. However, Pilmico has been a drag on the group since last year as high commodity prices lead to narrower margins. On the other hand, while Coca-Cola PH\u2019s current parent does not provide specific sales numbers for the Philippines, it noted in its 2nd quarter (2Q) 2023 earnings report that its Asia-Pacific operations was dragged down by a decline in sales in the Philippines.<\/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>