Monde Nissan shares now a bargain? (Stock Watcher Shorts Series)

In November last year, Maybank Investment Banking Group (IBG) projected that the price of Monde Nissin shares listed at the Philippine Stock Exchange (PSEI) would reach P11 in the next 12 months.

Last year in early November, the shares of Monde Nissin was hovering at around P8, which meant that an increase to P11 would yield a return of around 37%.

And the price of the shares of Monde Nissin indeed breached P11 in two occassions this year, or in early May and in the latter part of October. This year, the highest close of Monde Nissin shares was P11.90 in the early part of October.

However, Monde Nissin’s shares have been on a roller coaster ride in the past 12 months. Specifically, it dropped to P9 per share in the latter part of July, and to P9.18 per share on November 15.

This may mean that Monde Nissin shares are a good choice for bargain hunters, or market investors who are also looking for stocks that have gone down from their record highs.

And there may be a possibility that the price of the shares of Monde Nissin will decline anew as the company reported lower earnings in July-September or the third quarter.

The company said that it recorded a 13.8% decline in its attributable net income to P1.99 billion from P2.3 billion in the same period last year, attributable to restructuring costs and foreign exchange loss.

“Reported net income declined by 13.8% to P2 billion in the third quarter due to an impairment loss and restructuring costs in the meat alternative business, and foreign exchange loss, partially offset by a non-cash accounting gain of P495 million on the fair value of meat alternative guaranty asset,” Monde Nissin said in a regulatory filing early this month.

However, Monde Nissin said that its revenue in the third quarter went up by 3.4% to P21.01 billion from P20.45 billion in 2023.

It added that revenue from Asia-Pacific Branded Food and Beverage (APAC BFB) segment went up by 5.1% to P16.85 billion, while the meat alternative business logged an 8.3% decline to P3.3 billion.

“The APAC BFB business saw solid top line growth year on year in the third quarter, supported by volume growth in biscuits and other categories. Our third-quarter APAC BFB gross margin improved year over year and we expect this to continue in the fourth quarter,” Monde Nissin CEO Henry Soesanto said.

BETTER 9-MONTH EARNINGS

When it comes to revenue and net income for the January-September period, Monde Nissin reported increases.

For its net income in the January-September period, the company said it logged an increase of 5% to P6.08 billion from P5.79 billion during the same period last year.

Also, Monde Nissan recorded an increased in its revenue by 3.2% to P61.15 billion from P59.65 billion in 2023.

Maybank IBG sees the revenue of Monde Nissin reaching P78.74 billion this year and P82.64 billion in 2025. Net income projection was placed at P7.34 billion and P8.47 billion for 2024 and 2025, respectively.

Those figures show that Monde Nissin may indeed be a bargain for market investors, as price of its shares have gone down while the company remains profitable.

(IMAGE FROM MONDE NISSIN FACEBOOK PAGE)

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