{"id":328551,"date":"2024-07-29T02:05:01","date_gmt":"2024-07-28T18:05:01","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328551"},"modified":"2024-07-29T02:05:02","modified_gmt":"2024-07-28T18:05:02","slug":"stock-in-focus-emperador-inc-emi-29-july-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-emperador-inc-emi-29-july-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Emperador Inc. (EMI) – 29 July 2024 by Regina Capital Development Corp."},"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>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>29 July 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 19.50<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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As EMI continues to focus on facility expansion and operational enhancement to counter the slowdown in consumer consumption and to address its weakening brandy segment, we recommend a HOLD position with a target price of P19.50.<\/p>\n\n\n\n

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

Emperador, Inc. (EMI) reported a net income of P13.1 billion in the 1st quarter (1Q() of 2024, a -16% decrease from P15.6 billion in 1Q 2023. This is primarily attributable to a decline in the global market, with the rising consumer price index consequently leading to a decrease in consumers\u2019 disposable income. OPEX was maintained at 15% of revenues and other income, indicating a -17% reduction year-on-year (y\/y). Additionally, EMI’s total assets amounted to P155.7 billion, a +5% y\/y increase, while their liabilities contracted -8% y\/y to P57.4 billion.<\/p>\n\n\n\n

Both EMI\u2019s brandy segment and Scotch whiskey segment experienced a decrease in revenue and other income at -19% y\/y to P7.9 billion and -10% y\/y to P5.2 billion, respectively, attributed to an increase in price sensitivity and discretionary spending and the subsequent global softening of the spirits market. Despite the lower revenue booked in its latest earnings result, GPR of EMI remained steady at 34.10% in 1Q24. Zooming in the segments, GPRs of the Brandy and Whiskey business categories landed at 24% and 45%, respectively. Lower selling expenses led to a decline in the brandy segment\u2019s OPEX at -32% y\/y to P800 million, while the Scotch whiskey segment\u2019s OPEX were maintained at P1.1 billion.<\/p>\n\n\n\n

Currently, EMI has allocated a 2024 capex budget of P6.5 billion to support its whiskey business, with the majority of the capex allotted for capacity expansion, particularly for the Dalmore distillery, and to construct additional warehouses for the maturation complex in Invergordon. Another part of the capex will be used for its sustainability projects, such as an anaerobic digestion bioenergy center and a biomass boiler system, to achieve Whyte and Mackay\u2019s sustainability goal to be carbon neutral by 2030. Lastly, a small portion of the capex will be utilized for machinery and equipment upgrades to enhance the efficiency of its current facilities.<\/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>