{"id":329517,"date":"2024-09-17T13:10:30","date_gmt":"2024-09-17T05:10:30","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=329517"},"modified":"2024-09-17T13:10:32","modified_gmt":"2024-09-17T05:10:32","slug":"stock-in-focus-century-pacific-foods-inc-cnpf-17-sept-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-century-pacific-foods-inc-cnpf-17-sept-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Century Pacific Foods, Inc. (CNPF) – 17 Sept 2024 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>CNPF<\/td><\/tr>
Company Name<\/strong><\/td>Century Pacific Foods, Inc.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>17 Sept 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 43.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Century Pacific Food Inc. (CNPF) has rallied 15% month-on-month and has recently breached our previous target price (TP) of Php39.00. We, therefore, upgraded our Target Price by 10% to Php43.00 given how well CNPF has performed in the 1H 2024 and the company\u2019s strong initiative to expand its Coconut business.<\/p>\n\n\n\n

We forecast 2024 & 2025 net income to grow by 31% & 23%, respectively, on better margins as consumers are coping with inflationary pressures and lower global skipjack tuna prices continue to soften (1H23 average price of US$1,910\/metric ton vs. 1H24 average price of US$1,406\/mt). We believe that the easing macro-environment in the domestic market will positively affect the consumer sector (which CNPF is part of), as well as seasonality and mid-term pre-election spending. Current price movement suggests that the stock may retest\/break its all-time high price of Php40.00.<\/p>\n\n\n\n

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

Earnings in line with estimates<\/strong><\/p>\n\n\n\n

CNPF posted its 1st half (1H) 2024 net income of Php3.6 billion, up 14% year-on-year (y\/y), above consensus and in-line with our estimates. Consolidated revenues were up 13% to Php37.7 billion driven by a 7% growth in its Branded business and a 42% recovery of its OEM exports business from a low base last year. Gross profits climbed 23% to Php9.8 billion on a 210bps margin expansion to 26.1% amid favourable trends in commodity prices. EBITDA and operating income were both up 11% and 12% to Php5.4 billion and Php4.5 billion respectively, despite EBITDA margins going down 20bps to 14.3% as OPEX soared 35% on demand-generating activities and system improvements.<\/p>\n\n\n\n

Coconut business expanding<\/strong><\/p>\n\n\n\n

The company has acquired a 100% stake in Coco Harvest Inc., which owns a 6-hectare coconut processing facility situated in Misamis Occidental, Mindanao. The acquisition is valued at approximately US$40mn and would boost local production of higher-value coconut products such as coconut water, coconut milk, desiccated coconut, and virgin coconut oil. Recall that in 1Q 2024, CNPF sealed a new long-term contract with a global leader in the coconut water category, The Vita Coco Company, Inc., valued at US$40mn. Under the new contract, Vita Coco will require 90mn liters of coconut water over the next five years.<\/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>