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THE GROWTH TREND IS STRENGTHENED FURTHER

In 2024, the sales growth of F&B industry will be led by volume while selling prices keep stable from last year’s level. The economic recovery, together with the easing of “feel expensive” pressure of customers, will encourage food & beverage demand to grow at higher pace than the 2023 numbers. The benefits of decreasing input costs will extend in 2024 on the downward trend of the prices of agriculture commodities. Moreover, we suppose that the differences in net profit growth among players will be affected by the ability to manage SG&A costs of each company, or the benefit of 2023 low base performance. 

F&B companies’ dividend yield (DY) has exceeded deposit interest rates in the decreasing interest rate environment, making these stocks more attractive to defensive stock hunters. Together with positive outlook of the industry and YTD stock price performance, we recommend investors who prioritize DY can eye on QNS (TP: 55,800; DY: 8%) or MCM (non-rate; DY: 5%) while investors who looking for both DY and upside in stock price can consider VNM (TP: 81,500; DY: 5%) or SAB (non-rate; DY: 6%). Among F&B stocks, MSN (TP: 85,600) is an extraordinary with multi-industry business model and non-dividend payment. Relying on MSN ‘s expected triple-digit net profit growth and its divestment or equity listed stories (related to MHT & MCH) in 2024, we suggest investors following the arbitrage strategy can pick MSN