{"id":324310,"date":"2023-08-04T00:33:43","date_gmt":"2023-08-03T16:33:43","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324310"},"modified":"2023-08-23T22:25:14","modified_gmt":"2023-08-23T14:25:14","slug":"stock-in-focus-san-miguel-food-beverage-inc-fb-21-june-2023-by-rcbc-securities-2","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-san-miguel-food-beverage-inc-fb-21-june-2023-by-rcbc-securities-2\/","title":{"rendered":"Stock in Focus: San Miguel Food & Beverage, Inc. (FB) – 4 Aug 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>FB<\/td><\/tr>
Company Name<\/strong><\/td>San Miguel Food & Beverage Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>4 Aug 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 58.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We are reiterating our BUY rating on FB, however we are downgrading our Target Price to P58.00 per share, as the food & beverage business sees margins tightening on inflationary pressures and cost increases. Despite the margin tightening of the company, FB offers good prospects on strong dividend yields and as the stock\u2019s P\/E is significantly lower at 12.95x vs 15.61x of the industry average.<\/p>\n\n\n\n

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

San Miguel Food & Beverage (FB) The company was able to continue its topline growth performance for 1Q 2023, up +12% year-on-year (y\/y) to P93 billion. Price increases lifted topline performance. <\/p>\n\n\n\n

Gross profits declined -1.93% y\/y to P23.3 billion despite topline increase due to higher costs. Net income finished higher in single digits, up by +8% y\/y to P9.88 billion, bottomline influenced by a one-off gain from its subsidiary GSMI. The one-off gain covers the Don Papa transfer which generated an inflow of P1.5 billion and is recorded under other income.<\/p>\n\n\n\n

The company\u2019s beer business saw its topline grow +12% y\/y to P38.3 billion. Strong performance was recorded in both its domestic and international operations under the easing of COVID-19 restrictions. Bottomline under the beer business grew +38% y\/y to P6.8 billion. Spirits under GSMI saw a lackluster growth in revenue, up +2.57% y\/y to P12.9 billion. Despite a decline in gross profits, NI saw strong growth amid the one-off gains from the Don Papa transfer.<\/p>\n\n\n\n

The largest contributor to FB\u2019s revenue mix, its food business, posted only a slight improvement to topline, growing +2.77% y\/y to P41.9 billion. Bottomline suffers on higher costs and taxes, with gross profit declining significantly by -26.42% to P6.8 billion. The loss in gross profit severely impacted bottomline from this segment, leading to a decrease of -76% y\/y to P740 million. We expect bottomline to decline for the succeeding quarter as costs are still elevated.<\/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>