{"id":328924,"date":"2024-08-13T10:02:24","date_gmt":"2024-08-13T02:02:24","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328924"},"modified":"2024-08-13T10:02:25","modified_gmt":"2024-08-13T02:02:25","slug":"stock-in-focus-monde-nissin-corp-monde-13-aug-2024-by-first-metro-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-monde-nissin-corp-monde-13-aug-2024-by-first-metro-securities\/","title":{"rendered":"Stock in Focus: Monde Nissin Corp. (MONDE) – 13 Aug 2024 by First Metro 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>First Metro Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>13 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 11.20<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We upgrade Monde Nissin Corp. (MONDE) to BUY, with Target Price at PHP 11.20 per share. Recent price action now offers an opportunity to accumulate MONDE at attractive valuations. Our forecasts are unchanged and we project the company to post PHP15.1 billion in operating income next year, reflecting a two-year CAGR of 23%. Our Target Price implies 18.5x\/17.9x P\/E on 2024\/2025 earnings, at -0.5 standard deviation from its historical mean (24.5x).<\/p>\n\n\n\n

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

We expect MONDE to sustain strong performance well into next year. This will be on account of: (i) high margins for 2024-2025 as management has secured prices and supply for key input costs (wheat and palm oil) for the majority of this year. <\/p>\n\n\n\n

We anticipate margin upside next year, given the potential to secure even lower raw material prices as spot rates continue to decline for key raw materials; (ii) weakness in Quorn is close to bottoming out \u2013 the segment continues to be a drag, albeit EBIT having shown improvements y\/y, driven by restructuring benefits, lower D&A (on PPE write-off), and timing of A&P spend.<\/p>\n\n\n\n

Upside catalysts include: (i) faster-than-expected growth of APAC BFB, with market share gains; (ii) the end of uncertainty from Quorn \u2013 either through divestment or reacceleration of category growth; (iii) another growth leg \u2013 in the face of mature core segments under APAC BFB and demand softness for meat alternatives.<\/p>\n\n\n\n

Key risks, meanwhile, are: (i) intensifying competition, (ii) raw material price and forex volatility, (iii) supply chain disruption and capacity constraints, (iv) execution risks (esp. in meat alternatives), (v) food safety concerns and product mislabeling risks, and (vii) technological obsolescence.<\/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>