{"id":328975,"date":"2024-08-14T16:55:46","date_gmt":"2024-08-14T08:55:46","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328975"},"modified":"2024-08-14T16:55:48","modified_gmt":"2024-08-14T08:55:48","slug":"stock-in-focus-san-miguel-food-beverage-inc-fb-15-aug-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-san-miguel-food-beverage-inc-fb-15-aug-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: San Miguel Food & Beverage, Inc. (FB) – 15 Aug 2024 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>FB<\/td><\/tr>
Company Name<\/strong><\/td>San Miguel Food & Beverage Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>14 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 64.75<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We reiterate our BUY rating on FB and upgrading our Target Price to P64.75 with an upside of +35.60% as the food & beverage business continues to see rising operational costs. Despite inflationary pressures, FB offers good prospects on solid dividend yields.<\/p>\n\n\n\n

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

Earnings recap<\/h3>\n\n\n\n

San Miguel Food & Beverage (FB) SMFB\u2019s 1st half (1H) 2024 performance exhibited solid business growth, as consolidated sales increased to P192.9 billion, up 4% year-on-year (y\/y), while net income rose by +6% y\/y to P20 billion. This was driven by higher sales volumes, wider distribution, and improvements in the company\u2019s supply chain. SMB recorded a +1% topline growth to P75 billion due to price increases, however its Net Income (NI) declined by -7% to P12.6 billion. <\/p>\n\n\n\n

GSMI also experienced double-digit volume growth due to combined brand equity and aggressive expansion in distribution, driving its revenues to experience a +18% y\/y increase to P30bn, however its NI declined by -10% y\/y to P3.7 billion.<\/p>\n\n\n\n

Across SMC\u2019s business units, food remains the largest contributor to the mix, as its 1H 2024 revenue rose to P87.8 billion (+3% y\/y), with double-digit growth seen in the Prepared and Packaged Foods and stable Poultry sales. San Miguel Brewery Inc.\u2019s consolidated revenues had a minute increase of +1% to P75.1 billion, due to improved sales volume in 2Q 2024. GSMI\u2019s revenues had a significant increase to P30 billion (+18% y\/y), driven by volume growth of 10%, expanded distribution, and enhanced marketing campaign strategies.<\/p>\n\n\n\n

Wider brand distribution in Visayas and Mindanao<\/h3>\n\n\n\n

FB aims to expand its beer and spirits business nationwide to further strengthen their market position in the local spirits industry. The company is eyeing the geographic potential of Visayas and Mindanao to push for wider brand distribution and marketing. They plan to leverage their portfolio through utilizing product and package innovation in premium and mainstream segments, implementing consumption generating programs and intensifying brand visibility in a variety of trade channels.<\/p>\n\n\n\n

While consumer confidence is forecasted to strengthen by the latter half of the year, July\u2019s higher-than-anticipated headline inflation rate of 4.4%, alongside looming rate cuts may add additional pressure on the company\u2019s profitability. Increased commodity prices and economic headwinds may constrict household spending.<\/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>