{"id":326493,"date":"2024-01-25T13:57:58","date_gmt":"2024-01-25T05:57:58","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326493"},"modified":"2024-01-25T14:17:53","modified_gmt":"2024-01-25T06:17:53","slug":"stock-in-focus-monde-nissin-corp-monde-25-jan-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-monde-nissin-corp-monde-25-jan-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Monde Nissin Corp. (MONDE) – 25 Jan 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MONDE<\/td><\/tr>
Company Name<\/strong><\/td>Monde Nissin Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>25 Jan 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 10.55<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Given the strong rebound that we are projecting for MONDE\u2019s 4th quarter (Q4) earnings, we reaffirm our BUY rating on the stock with a TP of P10.55 per share.<\/p>\n\n\n\n

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

Earnings guidance released<\/h3>\n\n\n\n

MONDE recently released a press release highlighting the potential performance of some key metrics in their next earnings call. Our main takeaway from the disclosure was that Q4 was basically looking like a much stronger quarter for the company YoY. Some factors that caught our eye were the supposed mid-teens growth in core income and the more than 500bps expansion in core net margin after tax for Q4.<\/p>\n\n\n\n

Based on management\u2019s statements, we took the liberty of forecasting what 4Q23E and FY23E earnings could end up looking like. We assumed 7% total sales growth for FY23E, given management\u2019s guidance of high single digit growth. Upon factoring this in along with a 31.30% gross margin (also grounded on management\u2019s guidance), we estimate that 4Q23E gross profits likely grew by 25.6%, with the main driver being the continued strengthening in gross margins which more than made up for our mild sales growth forecast in Q4. <\/p>\n\n\n\n

Improved margin expansion likely came from the unwinding of MONDE\u2019s locked-in commodity pricing, thereby allowing it to capitalize on plunging wheat and palm oil prices. Overall FY23E Core EPS meanwhile is expected to have grown by 16.1%, although 4Q23E growth was likely significantly higher at 104.2%.<\/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>