UPEC: Scale Is a Key Focus for Medium-Term Growth Across Retail, Food and Beverage Businesses

We attended an investor group discussion with the management of no-moat Uni-President Enterprises, or UPEC, in which the company laid out medium-term growth strategies for its major businesses, including narrow-moat President Chain Store, or PCSC, and no-moat Uni-President China, or UPC. The key message delivered was that revenue scale would be the primary target for UPEC across its major markets in food and retail businesses. We left our fair value estimates unchanged for the three companies under our coverage and consider Uni-President China shares to be moderately undervalued, whereas Uni-President Enterprises and President Chain Store shares are slightly overvalued.