President Chain Store Earnings: Convenience Store Business Takes Lead in Earnings Growth; Retain FVE

Narrow-moat President Chain Store Corporation, or PCSC, reported 2023 results that largely met our expectations on the top line and operating profit. The convenience store businesses in Taiwan and the Philippines continued to be major sales and profit growth drivers during the fourth quarter, and we expect these segments to be key for the company’s longer-term growth. We retain our fair value estimate at TWD 276 per share, which implies 27 times 2024 price/earnings, 6 times EV/EBITDA, and 3.2% dividend yield. We think the shares are fairly valued now.