{"id":326361,"date":"2024-01-16T17:30:41","date_gmt":"2024-01-16T09:30:41","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326361"},"modified":"2024-01-16T17:30:43","modified_gmt":"2024-01-16T09:30:43","slug":"stock-in-focus-emperador-inc-emi-16-jan-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-emperador-inc-emi-16-jan-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Emperador Inc. (EMI) – 16 Jan 2024 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>EMI<\/td><\/tr>
Company Name<\/strong><\/td>Emperador Inc.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>16 Jan 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 21.50<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

Our Target Price for EMI is Php21.50 as we wait for the 2023 earnings report to better gauge the standing of the alcoholic beverages industry. Despite this, we believe that easing inflation, lowering the cost of raw materials, and higher growth potential of whisky increase the potential of EMI to significantly grow in the long-term. With a potential share price upside of 3.1% and 2024 dividend yield of 1.1%,
we believe that EMI is trading at its fair value. Maintain HOLD.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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

Opportunity in China?<\/h3>\n\n\n\n

China has recently opened an anti-dumping investigation on brandy (mainly targeting French cognac) imported from the European Union (EU) based on EU
brandy\u2019s price reductions of ~16% in the Chinese market. This mainly affected
French spirits companies (i.e. Remy Cointreau, Pernod Ricard, and LVMH) as France
accounts for the majority (~99.8% of all EU brandy exports in 2023 according to
Chinese customs data) of EU brandy exports. <\/p>\n\n\n\n

The expected resolution involving an
increase in tariffs for EU brandy products entering the Chinese market would likely
negatively impact European brandy companies and upset the spirits industry in
China but may be an opportunity for other companies in the alcoholic beverage
industry to strengthen their hold in the Chinese market. This includes EMI as the
firm looks into increasing its whisky product penetration into the region.
Nevertheless, we are waiting on more developments in this recent case to discern
the impact of the probe on the industry, overall.<\/p>\n\n\n\n

2024 Outlook<\/h3>\n\n\n\n

We believe that Emperador (EMI) should be able to make a comeback in 2024
owing to last year\u2019s low base and easing inflation. We also expect the higher margin
whisky segment to further increase its relevance as the sales mix tips in favour of
whisky over brandy as the premiumization trend across regions remains. This trend
is more prevalent in the Chinese market but has since begun to decline amid its
economic slowdown. <\/p>\n\n\n\n

Nonetheless, we still have a favourable outlook on the
premiumization trend as several of EMI\u2019s products hold leadership positions (Global
and Asian Single Malt Ranking (IWSR)) across the board.<\/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>