{"id":325297,"date":"2023-10-12T11:35:59","date_gmt":"2023-10-12T03:35:59","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325297"},"modified":"2023-10-12T11:36:01","modified_gmt":"2023-10-12T03:36:01","slug":"stock-in-focus-century-pacific-foods-inc-cnpf-12-oct-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-century-pacific-foods-inc-cnpf-12-oct-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Century Pacific Foods, Inc. (CNPF) – 12 Oct 2023 by Regina Capital Development Corp."},"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>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>12 Oct 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 31.40<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We recommend a HOLD rating with a Target Price of P31.40. This is based on 17.63x P\/E on 2024 EPS and is above the stock\u2019s 5-year P\/E mean, which was derived using the Discounted Cash Flow (DCF) method. The potential upside for this stock is only in the single digits from its last traded price. CNPF fundamentally sees continued strong upside from its branded business, however it would be better to consider stocks with higher upside.<\/p>\n\n\n\n

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

Century Pacific Food, Inc. (CNPF) recorded a net income of P3.2 billion in the 1st half (1H) 2023, up by +8.24% year-on-year (y\/y). In the 2nd quarter (2Q) 2023, bottomline grew by +10.1% y\/y to P1.7 billion. Revenues rose by +8.8% y\/y to P17.8 billion, on the back of the company\u2019s strong branded business which grew by +15% y\/y in 2Q 2023. The company recorded a decline in OEM, in which the growth in branded business offset these declines.<\/p>\n\n\n\n

The company observes a trend in downtrading as consumers look to try and stretch their food budget. Smaller packages have been garnering much more attention lately from consumers. Despite inflation starting to decline, consumer sentiment remains the same with consumers still monitoring their spending. The increase in minimum wage should allow for greater disposable income, fostering for a better consumer outlook.<\/p>\n\n\n\n

Elevated prices under OEM brings challenges to this segment. Market softened as a result, leading to a decline of -7% y\/y to topline. Company sees its dairy business taking a larger revenue share of 28% around 3-4pps higher y\/y in 1H 2023. <\/p>\n\n\n\n

The company has been working on expanding its Milk and emerging businesses as it is still in an “investment mode” for these businesses. Branded business grew the strongest for CNPF (+28% y\/y), which includes the aforementioned emerging business along with marine and meat. The company is looking to broaden its market prescence in milk, unmeat, and in pet food. Expansion in milk should be good as these produce high margins. For 2023, a single-digit growth is projected in bottomline.<\/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>