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Uni-President Enterprises Corp 1216

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Stock XTAI Rating as of
TWD 79.20 −0.60 (0.75%)
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As of Delayed Price Closed
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Company Report

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UPEC Earnings: Mainland China Food Business Drove Solid Operating Profit Growth; Keeping Fair Value

Jacky Tsang

No-moat Uni-President Enterprises’, or UPEC’s, first-quarter results were broadly consistent with our estimates. Revenue growth was driven by the consolidation of Carrefour Taiwan into its retail segment, while the mainland China food business drove operating profit growth. We keep our 2024-28 earnings forecasts unchanged and retain our fair value estimate at TWD 68 per share, which implies 17 times 2024 price/earnings, 5 times enterprise value/EBITDA, and 4.3% dividend yield. We think shares are currently overvalued, and we prefer names in the China packaged food sector, such as Tingyi and WH Group, with higher dividend yields.

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Price vs Fair Value

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1216 is trading at a 843% premium.
Price
TWD 79.20
Fair Value
TWD 55.00
Uncertainty
Low
1-Star Price
TWD 79.00
5-Star Price
TWD 86.60
Economic Moat
Cjy
Capital Allocation
Yyjjgbk

Bulls Say, Bears Say

Bulls

The company has established leadership in food, beverage, and retail outlets in Taiwan, making it difficult for other players to replicate and reducing potential competition from local players.

Bears

UPEC can at most maintain the existing thin return margin over WACC going forward, as a sizable mix of segments do not generate excess returns over WACC, and profitable acquisition targets at a favorable price are difficult to spot in the mature packaged food industry.

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Trading Information

Previous Close Price
TWD 79.00
Day Range
TWD 78.90–80.00
52-Week Range
TWD 66.80–80.50
Bid/Ask
TWD 79.20 / TWD 79.40
Market Cap
TWD 450.02 Bil
Volume/Avg
15.0 Mil / 9.2 Mil

Key Statistics

Price/Earnings (Normalized)
46.82
Price/Sales
0.74
Dividend Yield (Trailing)
3.95%
Dividend Yield (Forward)
3.95%
Total Yield
3.98%

Company Profile

Uni-President Enterprises is one of the largest food conglomerates in Asia. It produces and sells a comprehensive range of food products through its company and affiliates. Core business includes food manufacturing and investments in other related business. Product categories include feeds, flour, edible oils, soy sauce, meat products, instant noodles, bread, beverages, dairy products, frozen food, and health food. Through its network of 200 affiliates, its convenient stores, retail, logistics, finance, and recreation operations are located all across Taiwan, mainland China, and Southeast Asia.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Large Value
Total Number of Employees
5,636
Website
https://www.uni-president.com.tw

Competitors

Valuation

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Metric
1216
09633
00322
Price/Earnings (Normalized)
 46.8239.2219.59
Price/Book Value
 3.3616.573.87
Price/Sales
 0.7411.050.67
Price/Cash Flow
 6.4933.429.06
Price/Earnings
1216
09633
00322

Financial Strength

Metric
1216
09633
00322
Quick Ratio
 0.710.990.70
Current Ratio
 1.001.080.84
Interest Coverage
 12.92143.548.13
Quick Ratio
1216
09633
00322

Profitability

Metric
1216
09633
00322
Return on Assets (Normalized)
 3.74%26.35%5.75%
Return on Equity (Normalized)
 18.87%48.37%24.79%
Return on Invested Capital (Normalized)
 5.12%40.36%9.81%
Return on Assets
1216
09633
00322
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K
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