{"id":324415,"date":"2023-08-11T00:58:37","date_gmt":"2023-08-10T16:58:37","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324415"},"modified":"2023-08-11T00:58:39","modified_gmt":"2023-08-10T16:58:39","slug":"stock-in-focus-universal-robina-corp-urc-11-aug-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-universal-robina-corp-urc-11-aug-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Universal Robina Corp. (URC) – 11 Aug 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>URC<\/td><\/tr>
Company Name<\/strong><\/td>Universal Robina Corp.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>11 Aug 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 168.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We maintain our BUY recommendation towards URC with a Target Price of P168.00\/share as both its BCF and AIC segments register strong numbers. <\/p>\n\n\n\n

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

Universal Robina Corporation (URC) Core Net Income (NI) rises by +11.02% year-on-year (y\/y) to P2.77 billion in 2Q 2023, and up +10.95% y\/y to P6.38 billion in 1H 2023. Net income to parent rises in the same quarter to +19.09% y\/y to P3.25 billion and up +7.44% y\/y to P6.66 billion for 1H 2023.<\/p>\n\n\n\n

URC sees growth under both BCF and AIC<\/strong><\/p>\n\n\n\n

Revenue under Branded Consumer Foods (BCF) segment grew slightly for the quarter, up 4.41% y\/y to P27.44bn. BCF PH grew by +7% y\/y to P19.3bn, while its international segment went up slightly by +1% y\/y to P7.9bn. EBIT margins for BCF PH decline by 20bps to 12%, while BCF International grew by 168bps to 9.9%. <\/p>\n\n\n\n

In other countries in Southeast Asia, the company implemented price reengineering which saw biscuits reduced in size, while maintaining the same price points to preserve margins. Sales declined in the mid-single digits for Thailand as biscuits suffered the most.<\/p>\n\n\n\n

The Agro-Industrial and Commodities (AIC) segment saw revenues spike by +25.83% y\/y to P11.39 billion. Under AIC, SURE and AIG drove topline growth, recording double digit growth. Despite sugar imports increasing, prices remain elevated, allowing AIG\u2019s SURE to benefit from higher selling prices.<\/p>\n\n\n\n

Margins grew despite higher costs from key commodities and higher logistics expenses due to efficient price increases and cost discipline. Core NPM grew by 8pps in 2Q23, while GPM improves by 32bps to 26.33%.<\/p>\n\n\n\n

Impact of “junk food tax”<\/strong><\/p>\n\n\n\n

Management noted that the supposed junk food tax should it be implemented would impact pricing by +50% to the final product cost. The issue highly affects the lower-income segment as these consumers are much more sensitive to price changes.<\/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>