reports
- Naveed Majeed
Sri Lanka: Equity Strategy - Deep Value Unveiled As Hyperinflation Sub...
* As hyperinflationary dynamics begin to subside, the residual effect has unveiled a large dislocation in valuations of listed domestic players. * Steep price increases taken by domestic firms have been more than enough to offset a decline in volumes over 2022, resulting in strong revenue and earnings growth to new highs, despite a deteriorating macro picture. With the expansion in bottom line to new highs, it is our view that valuations need to adjust accordingly with the risk premium ...
JKH.N0000 JOHN KEELLS HOLDINGS PLC
ACL.N0000 ACL CABLES
CARG.N0000 CARGILLS (CEYLON) PLC
CCS.N0000 CEYLON COLD STORES
CTC.N0000 CEYLON TOBACCO
DIST.N0000 DISTILLERIES CO. OF SRI LANKA PLC
LLUB.N0000 CHEVRON LUBRICANTS LANKA PLC
HHL.N0000 HEMAS HOLDINGS
LION.N0000 LION BREWERY
NEST.N0000 NESTLE LANKA
GLAS.N0000 PIRAMAL GLASS CEYLON PLC
- Naveed Majeed
Sri Lanka: Consumer Sector Update 2023 - The Dividends of Recovery
* Steep price increases taken by domestic retail and consumer firms in 2022 were more than enough to offset a decline in volumes, resulting in strong revenue and earnings growth. * We saw a similar outcome unfolding in Turkey last year, where hyperinflation in the country led to record revenue and earnings growth for supermarket chains and consumer companies. * Recent electricity tariff and PAYE tax increases are negative headwinds for overall consumption in the near-term, but mode...
- Naveed Majeed
Nestle Lanka: 3Q CY22 - Poised to benefit from a recovery in consumpti...
We roll over valuations to CY23E and arrive at a fair value of LKR 1,200/share based on a 3-stage DCF model (+30.9% upside). Coming out of an uncertain period of price-driven growth, NEST stands to benefit from a more sustainable recovery in household consumption. Profit margins will normalise in CY23E; however, we expect NEST will be cautious in increasing expenditure which will support margins. Our target price corresponds to a P/E of 5.6x CY23E EPS, at a significant discount to NEST’s 5-ye...
- Alyssa Gammoudy
Nestlé/FY21 results: strong volumes
Today Nestlé released its full year 2021 statement, which mostly reflects the recovery of out-of-home consumption. Reported sales were CHF87.1bn, which is 3.3% higher compared to the CHF84.3bn in FY20. Organic sales growth came in at 7.5% of which real internal growth (RIG) was 5.5%. This suggests the company still has some ammunition to offset some of the expected inflation through pricing. All regions and categories contributed to the growth. Looking at channels the organic growth in retail sa...
- Alyssa Gammoudy
- Jan Frederik Slijkerman
- Jeroen van den Broek
- Nadège Tillier
- Suvi Platerink Kosonen
- Timothy Rahill
- Naveed Majeed
Nestle Lanka: 2Q CY21 - Increased reliance on essential categories in ...
We revise our CY21E estimates downwards; however maintain our target multiple of 18.0x CY21E earnings and arrive at a target price of LKR 1,260/share (-13.1% to old; -0.4% upside). Including a CY21E dividend of LKR 66.00/share, we derive a total return of +4.8%. HOLD. NEST reported an EPS of LKR 15.71 for 2Q CY21, marginally above our estimate of LKR 14.88/share for the quarter. Revenues came in at LKR 10.1bn, down 11.8% QoQ (+22.4% YoY) amidst travel restrictions during the second half of th...
- Naveed Majeed
Nestle Lanka: 1Q CY21 - Poised for growth amidst consumer recovery
Following changes to our estimates, we upgrade NEST to a BUY with a revised target price of LKR 1,450/share (previously LKR 1,020/share). Including a CY21E dividend of LKR 72.00/share, we derive a total return of +38.6%. BUY. NEST reported its strongest quarterly EPS of LKR 32.42 in 1Q CY21, coming significantly above our expectations. The company also posted its highest quarterly turnover of LKR 11.5bn up 24.9% YoY (+15.2% QoQ), which we believe is predominantly volume driven. On the other h...
- Lakshini Fernando
Sri Lanka: Consumer SL - "Steady as she goes"; a sturdy rebound in 202...
We expect the consumer sector to see a steady recovery, supported by a gradual rebound in economic activity and income levels. The sector looks to provide more sustainable long term growth, rather than growth fueled by government concession to consumers. From a macro perspective, consumer demand and spending are slated to increase on the back of historically low interest rates and low consumption taxes. A domestic focused economic growth agenda would support higher labor demand, particular...
- Naveed Majeed
Nestle Lanka: Sri Lanka: NEST SL - Demand to remain stable; cost press...
We maintain our target price of LKR 1,020/share, and including a dividend of LKR 53.00/share in CY21E, derive a total return of -10.5%. HOLD. NEST reported an EPS of LKR 12.85 for 4Q CY20, broadly in-line with our estimates. Revenue growth slowed down from 3Q due to localised lockdowns in the Western Province, while schools continued to remain closed. However, take-home product ranges benefitted from consumers’ increasing preference for at-home consumption in our view. Further, we believe NES...
- Naveed Majeed
Nestle Lanka: 3Q CY21 - Demand bounces back; more stability in CY21E
We maintain our target price at LKR 1,020/share and including a CY21E dividend of LKR 47.00/share, we derive a total return of –3.3%. HOLD. NEST reported a 3Q CY20 recurring net profit of ~LKR 1.0bn, up 13.0% YoY, driven by growth in volumes and lower operational expenses. As expected, with economic activities returning to regular levels, schools re-opening in July, and better than expected demand conditions in rural markets due to a favourable harvest season, led to the uptick in demand. Loo...
- Mangalee Goonetilleke
Nestle Lanka: Cost cuts aid 2Q; demand gradually recovering
We revise our TP for Nestle Lanka to LKR 1,020/share (previously LKR 905/share). Including a CY20E dividend of LKR 42.00/share, we derive a total return of –0.5%. HOLD. NEST reported a 2Q CY20 recurring net profit of LKR 595mn, up 58.3% YoY, driven mainly by lower operational and interest costs. Topline was down 2.2% YoY while EBIT margins improved by 3.2pp YoY due to lower costs. Post-lockdown in 2Q, demand remained muted as school openings delayed and consumers remained cautious of dining ....
- Mangalee Goonetilleke
Nestle Lanka: Demand woes continue despite lockdown lift
We incorporate the impact on CY20E earnings from the COVID-19 lockdown and revise our target price to LKR 905/share (previously LKR 1,255/share). Including a CY20E dividend of LKR 35.00/share, we derive a total return of -13.8%. HOLD. NEST reported a 1Q CY20 recurring net profit of LKR 644mn (+12.5% YoY), driven mainly by lower interest costs. Topline was up 3.3% YoY while EBIT margins remained flat for the quarter. Sales were impacted during the last two weeks of March due to the lockdown. ...
- Nirgunan Tiruchelvam
JDE Peet's frothy IPO underlines value in Nestle Nigeria and Unilever ...
The sleepy IPO market just received an espresso shot. Amidst the doom and gloom, JDE Peet's raised US$2.5bn last week, in Europe's biggest IPO since 2018. It was also the first major listing that was conducted entirely in the brave new world of Zoom calls. The deal is extraordinary in that Covid-19 did not dent its prospects. On the contrary, the issuers actually rushed the deal forward to benefit from the post-March stock market rally. The IPO process was reduced from four weeks to 10 days d...
- Nirgunan Tiruchelvam
Why Unilever and Nestle are better prospects than Zoom right now
When the history of Covid-19 is written, it may be recorded as the Zoom era. The videoconference provider has spread as rapidly as the virus. It’s users have risen 30 fold from just 10 million in December 2019 to almost 300 million in April 2020. Like Google and Xerox, Zoom is a now used as verb. [-eu-west-1.amazonaws.com/exotix-content-uploads/jlKmZltrPwcxUPXecrBTnY2SQyGGyhy1WJBMI30I.png] Investors are clamouring for exposure to Zoom and its videoconferencing peers, such as Cisco W...
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
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