{"id":329368,"date":"2024-09-09T06:55:38","date_gmt":"2024-09-08T22:55:38","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=329368"},"modified":"2024-09-09T06:56:15","modified_gmt":"2024-09-08T22:56:15","slug":"stock-in-focus-monde-nissin-corp-monde-9-sept-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-monde-nissin-corp-monde-9-sept-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Monde Nissin Corp. (MONDE) – 9 Sept 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>9 Sept 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 11.95<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We are starting to see MONDE\u2019s focus shift majorly towards their APAC BFB (Asia Pacific Branded Food and Beverages) segment, with 2024 allocation heavily geared towards the segment at P4.9-Billion, which is equivalent to 83% of total CAPEX for the year. This is also almost double the segment\u2019s allocation on a YoY basis compared to last year\u2019s P2.6-Billion. Coupling this with the expectations on improvements on the macroeconomic environment, we see MONDE as a company poised to take advantage of this moving forward. We therefore reiterate our BUY rating for the stock with a Target Price of P11.95.<\/p>\n\n\n\n

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

Expanding horizons, one biscuit at a time<\/strong><\/p>\n\n\n\n

The Board of Investments (BOI) recently approved an expansion to MONDE\u2019s P1.2-Billion biscuit manufacturing facility in Davao City, which would add a biscuit manufacturing line to the cake line that has been operational since early this year. The latest line expansion is expected to begin commercial operations this month. <\/p>\n\n\n\n

We note that MONDE currently has an existing butter coconut biscuits plant in Laguna, which is aimed at supplying the Luzon market. This capacity expansion essentially puts MONDE in a position to cater to demand in Visayas and Mindanao. On top of this, the company also plans to expand distribution of the facility to Indonesia and other Southeast Asian countries.<\/p>\n\n\n\n

Reclaiming market share in a profitable segment<\/strong><\/p>\n\n\n\n

We acknowledge that there has been a minor decline in MONDE\u2019s market share in the Biscuits space last quarter, which management attributed to an unscheduled machine breakdown. The company said during the last briefing that this is already a thing of the past as the issue was fixed within a couple of weeks. <\/p>\n\n\n\n

With this, we forecast that MONDE is set to reclaim its lost market share in the Biscuit segment as a result of the additional capacity from the Davao facility. Most importantly, we observed that profit margins of comparable companies showed that biscuits and cookies have higher margins as compared to noodles, with the former\u2019s margins ranging between 25-40% vs the latter\u2019s 10-20%.<\/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>