{"id":328737,"date":"2024-08-04T13:54:40","date_gmt":"2024-08-04T05:54:40","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328737"},"modified":"2024-08-27T00:31:20","modified_gmt":"2024-08-26T16:31:20","slug":"stock-in-focus-shakeys-pizza-asia-ventures-inc-pizza-5-aug-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-shakeys-pizza-asia-ventures-inc-pizza-5-aug-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Shakey’s Pizza Asia Ventures, Inc. (PIZZA) – 5 Aug 2024 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>PIZZA<\/td><\/tr>
Company Name<\/strong><\/td>Shakey’s Pizza Asia Ventures, Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 13.21<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We maintain our BUY rating on PIZZA, setting a fair value target of P13.21 per share.<\/p>\n\n\n\n

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

Shakey\u2019s Pizza Asia Ventures Inc. (PIZZA) reported a Net Income (NI) of P171 million for the 1st quarter (1Q) 2024, marking a decline of -4.60% year-on-year (y\/y). This drop was primarily due to a steep +40.55% increase in operating expenses, which countered the +13.93% rise in gross profits. This performance aligns with management\u2019s guidance that 1Q 2024 would likely see a contraction due to elevated costs and increased opex before recovering in the latter half of the year as expansion plans take effect.<\/p>\n\n\n\n

Revenues for 1Q 2024 saw a moderate decline of -1.32% y\/y, reaching P3.09 billion,
while systemwide sales increased by 15% y\/y to P4.7 billion. Operating margins fell -2.10% y\/y as higher investments in demand-gathering activities and efforts to stabilize inventory levels offset the +15.45% gain in gross profit margins.<\/p>\n\n\n\n

Operating costs increased accordingly to keep up with the growth, in line with the expansion plans, and any increases in gross margin were reinvested into activities that further strengthened the brand. Short-term profitability was impacted by lower topline growth and an increase in opex spending of +20.6% y\/y. Management expects profitability to improve as opex levels normalize and input cost pressures ease.<\/p>\n\n\n\n

The addition of roughly +91 units to PIZZA’s global network in 1Q 2024 significantly contributed to revenue growth. With brands including Shakey’s, Potato Corner, Peri-Peri Charcoal Chicken and Sauce Bar, R&B Milk Tea, and Project Pie, PIZZA encompasses 2,232 units worldwide as of 1Q24.<\/p>\n\n\n\n

Considering consumer spending and discretionary purchases were burdened by continuously high inflation, SSSG remained unchanged and flat y\/y. The main growth driver, lower-priced companies like Potato Corner, performed better than full-service restaurants, which was notably affected by a weaker customer interest. Shakey’s remains the largest contributor to PIZZA\u2019s overall revenues, followed by Potato Corner and Peri-Peri. About 60% of revenue comes from dine-in business, while 40% comes from off-premises.<\/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>