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Uni-President China Holdings Ltd 00220

Morningstar Rating
HKD 5.90 −0.04 (0.67%)
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Company Report

Uni-President China Earnings: Food Segment Remains a Drag; Reduce FVE, but Shares Still Undervalued

No-moat Uni-President China, or UPC, reported 2023 results that trailed our expectations on the top line and core operating profit, dragged by weaker-than-expected food segment sales and higher selling expenses. However, a one-off land sales gain and lower tax rate drove net income higher than our estimate. We reduced our five-year sales CAGR projection by 30 basis points to 3.7% as we project a milder recovery in instant noodles sales in 2024. The firm’s double-digit top-line growth target for 2024 is a tall order, in our view. We also lowered our 2024-28 net income forecasts by 1%-16% to account for a slower rebound in margins. As a result, we reduce our fair value estimate to HKD 6.60 per share, from HKD 7.20.

Price vs Fair Value

00220 is trading at a 11% discount.
Price
HKD 5.90
Fair Value
HKD 8.30
Uncertainty
High
1-Star Price
HKD 39.27
5-Star Price
HKD 3.35
Economic Moat
Hfnh
Capital Allocation
Szgcwrqps

Bulls Say, Bears Say

Bulls

The company has been able to maintain its market share in the major product categories despite the highly competitive environment, proving its expertise in the China packaged food and drinks markets.

Bears

The RTD drinks and instant noodle markets in China are mostly saturated, with challenges from competing channels like freshly made tea chains and food delivery apps and so on.

Is it the right time to buy, sell, or hold?
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Trading Information

Previous Close Price
HKD 5.94
Day Range
HKD 5.865.99
52-Week Range
HKD 4.307.96
Bid/Ask
HKD 5.90 / HKD 5.91
Market Cap
HKD 25.48 Bil
Volume/Avg
10.5 Mil / 13.1 Mil

Key Statistics

Price/Earnings (Normalized)
20.73
Price/Sales
0.80
Dividend Yield (Trailing)
6.40%
Dividend Yield (Forward)
7.86%
Total Yield
6.40%

Company Profile

Uni-President China is a leading instant food and beverage producers in mainland China. Its major products include RTD tea, coffee, juice, and instant food such as instant noodles and self-heating packaged food. It is majority-owned by parent company Uni-President Enterprises Corporation, Taiwan's leading food conglomerate.
Sector
Consumer Defensive
Industry
Beverages - Non-Alcoholic
Stock Style Box
Mid Value
Total Number of Employees
33,321

Competitors

Valuation

Metric
00220
09633
00322
Price/Earnings (Normalized)
20.7347.0316.25
Price/Book Value
1.7215.933.23
Price/Sales
0.8010.620.56
Price/Cash Flow
10.7038.327.26
Price/Earnings
00220
09633
00322

Financial Strength

Metric
00220
09633
00322
Quick Ratio
0.600.990.70
Current Ratio
0.821.080.84
Interest Coverage
30.56143.548.13
Quick Ratio
00220
09633
00322

Profitability

Metric
00220
09633
00322
Return on Assets (Normalized)
6.69%22.38%6.18%
Return on Equity (Normalized)
11.59%42.70%27.28%
Return on Invested Capital (Normalized)
8.95%35.73%10.53%
Return on Assets
00220
09633
00322
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