Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>Global branded food and beverage outfit <strong><a href="https://www.smartkarma.com/entities/del-monte-pacific-ltd" target="_blank" data-smartkarma-citation="entities:5051:1" rel="noopener">Del Monte Pacific (DELM SP)</a></strong> recently announced group sales grew by 3% to US$68mn in the 3Q23 (April Y/E).</li>
<li>However net profit declined by 62% to US$9.8mn due to lower operating results and increased interest expense from higher cost bank loans.</li>
<li>Del Monte's net debt, net gearing, and net debt/EBITDA were S$2.2bn, 582.5%, and 6.1x, compared to S$1.45bn, 211%, and 4.2x a year ago. </li>
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Global branded food and beverage outfit Del Monte Pacific (DELM SP) recently announced group sales grew by 3% to US$68mn in the 3Q23 (April Y/E).
However net profit declined by 62% to US$9.8mn due to lower operating results and increased interest expense from higher cost bank loans.
Del Monte's net debt, net gearing, and net debt/EBITDA were S$2.2bn, 582.5%, and 6.1x, compared to S$1.45bn, 211%, and 4.2x a year ago. 


Del Monte Pacific: Interest Costs Weigh On Financials

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Chongqing Hongjiu Fruit / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chongqing-hongjiu-fruit" target="_blank" data-smartkarma-citation="entities:36023:1" rel="noopener">Chongqing Hongjiu Fruit (CHF HK)</a>, a multi-brand fruit company in China, is pre-marketing an HKEX IPO to raise US$200-300 million.</li>
<li>The fundamentals are uninspiring as it is delivering profitable growth with a heavy cash burn. The rising but tiny market share suggests a lack of sustainable competitive advantage.</li>
<li>Hongjiu Fruit aims to be the first HKEx-listed fruit distributor. Investors can likely avoid a bitter aftertaste by remaining on the sidelines.</li>
</ul>



Chongqing Hongjiu Fruit (CHF HK), a multi-brand fruit company in China, is pre-marketing an HKEX IPO to raise US$200-300 million.
The fundamentals are uninspiring as it is delivering profitable growth with a heavy cash burn. The rising but tiny market share suggests a lack of sustainable competitive advantage.
Hongjiu Fruit aims to be the first HKEx-listed fruit distributor. Investors can likely avoid a bitter aftertaste by remaining on the sidelines.


SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;</strong>SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
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<h2>Del Monte Pacific Limited</h2>
<h3>Temporary dip in margins</h3>
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<li>3Q22 results exceeded expectations. 3Q22 revenue and PATMI at 28%/34% of our FY22e forecasts. Revenue from Americas exceeded expectations, but gross profit lower than expected due to inflationary pressures.</li>
<li>US subsidiary DMFI sales grew 6.5% YoY, mainly supported by branded retail core canned vegetable and fruit and food service channels.</li>
<li>DMPI saw sales of S&amp;W branded business increase 11.2% YoY, mainly driven by higher sales of S&amp;W fresh pineapple in North Asia and Singapore, and higher prices to counter inflation.</li>
<li>Maintain BUY with a higher TP of S$0.63, from S$0.62. We raise FY22e PATMI by 7.5%, as we lower our forecasts for operating and interest expenses, in line with the trend for 9M22. Our TP is now pegged to 12x FY22e P/E, down from 13x. We still apply a 20% discount to the industry valuation, which is now 15x, down from 16x.</li>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.




Del Monte Pacific Limited
Temporary dip in margins





3Q22 results exceeded expectations. 3Q22 revenue and PATMI at 28%/34% of our FY22e forecasts. Revenue from Americas exceeded expectations, but gross profit lower than expected due to inflationary pressures.
US subsidiary DMFI sales grew 6.5% YoY, mainly supported by branded retail core canned vegetable and fruit and food service channels.
DMPI saw sales of S&amp;W branded business increase 11.2% YoY, mainly driven by higher sales of S&amp;W fresh pineapple in North Asia and Singapore, and higher prices to counter inflation.
Maintain BUY with a higher TP of S$0.63, from S$0.62. We raise FY22e PATMI by 7.5%, as we lower our forecasts for operating and interest expenses, in line with the trend for 9M22. Our TP is now pegged to 12x FY22e P/E, down from 13x. We still apply a 20% discount to the industry valuation, which is now 15x, down from 16x.











(Non-SGX Report) Del Monte Pacific Limited - Temporary Dip in Margins

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>For our next Corporate Webinar we are glad to welcome <a href="https://www.smartkarma.com/entities/del-monte-pacific-ltd" target="_blank" data-smartkarma-citation="entities:5051" rel="noopener">Del Monte Pacific (DELM SP)</a> Chief Corporate Officer Ignacio (Iggy) Sison and Investor Relations Manager Jennifer Luy.</p>
<p>In the upcoming webinar, Jennifer and Iggy will share a short company presentation, after which they will engage in a fireside chat with Smartkarma Insight Provider, <a href="https://www.smartkarma.com/profiles/nicolas-van-broekhoven-24a66c2d-bca4-4f5b-adda-c4e2bcc509f4" target="_blank" data-smartkarma-citation="accounts:1208" rel="noopener">Nicolas Van Broekhoven</a>. A live Q&amp;A session will follow.</p>
<h3>The Corporate Webinar will be hosted on Tuesday, 15 March 2022, 17:00 SGT.</h3>
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<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=84649603353" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
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<p>Dual-listed on the SGX and the Philippine Stock Exchange, Del Monte Pacific Limited is a global branded F&amp;B company that offers premium quality, healthy products. These include packaged fruit, vegetable and tomato, sauces, condiments, pasta, broth, stock, juices, and frozen pineapple under various brands - it also sells fresh pineapples under the S&amp;W brand.</p>
<p>It is proud of its heritage brands - Del Monte, S&amp;W, Contadina, and College Inn – some of which originated in the USA more than 100 years ago. The Group has exclusive rights to use the Del Monte trademarks for packaged products in the United States, South America, the Philippines, Indian subcontinent, and Myanmar, while it owns S&amp;W globally except for Australia and New Zealand. The Group owns the Contadina and College Inn trademarks in various countries.</p>
<p>Corporate Webinars by <a href="https://www.smartkarma.com/home/corporate-solutions/" target="_blank" rel="noopener">Smartkarma Corporate Solutions</a> feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.</p>

For our next Corporate Webinar we are glad to welcome Del Monte Pacific (DELM SP) Chief Corporate Officer Ignacio (Iggy) Sison and Investor Relations Manager Jennifer Luy.
In the upcoming webinar, Jennifer and Iggy will share a short company presentation, after which they will engage in a fireside chat with Smartkarma Insight Provider, Nicolas Van Broekhoven. A live Q&amp;A session will follow.
The Corporate Webinar will be hosted on Tuesday, 15 March 2022, 17:00 SGT.

Register for the Webinar here

Dual-listed on the SGX and the Philippine Stock Exchange, Del Monte Pacific Limited is a global branded F&amp;B company that offers premium quality, healthy products. These include packaged fruit, vegetable and tomato, sauces, condiments, pasta, broth, stock, juices, and frozen pineapple under various brands - it also sells fresh pineapples under the S&amp;W brand.
It is proud of its heritage brands - Del Monte, S&amp;W, Contadina, and College Inn – some of which originated in the USA more than 100 years ago. The Group has exclusive rights to use the Del Monte trademarks for packaged products in the United States, South America, the Philippines, Indian subcontinent, and Myanmar, while it owns S&amp;W globally except for Australia and New Zealand. The Group owns the Contadina and College Inn trademarks in various countries.
Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.

Smartkarma Corporate Webinar | Del Monte: Transformation of a Heritage Food Company

<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX.</strong>&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
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<h2>Del Monte Pacific Limited</h2>
<h3>Strong growth momentum in the US</h3>
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<li>2Q22 results exceeded expectations. 2Q22 revenue and PATMI at 29%/41% of our FY22 forecasts. Revenue from Americas exceeded expectations.</li>
<li>US subsidiary DMFI branded retail sales grew 11% YoY, with strong momentum from core vegetable business and shipments in preparation for holiday promotional activity.</li>
<li>DMPI international sales increased 18% YoY on robust sales of packaged fruit and beverages in US and Europe and S&amp;W packaged pineapple and mixed fruit in North Asia.</li>
<li>Maintain BUY with a higher TP of S$0.62 from S$0.60. Our FY22e PATMI has been raised slightly by 2% to US$88.2mn, as we increase our sales forecasts for Americas, but lower our sales forecasts for Asia Pacific, in line with lower revenue in 2Q22 from the Philippines, due to a high base from impact of the pandemic in 2Q21.</li>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.




Del Monte Pacific Limited
Strong growth momentum in the US





2Q22 results exceeded expectations. 2Q22 revenue and PATMI at 29%/41% of our FY22 forecasts. Revenue from Americas exceeded expectations.
US subsidiary DMFI branded retail sales grew 11% YoY, with strong momentum from core vegetable business and shipments in preparation for holiday promotional activity.
DMPI international sales increased 18% YoY on robust sales of packaged fruit and beverages in US and Europe and S&amp;W packaged pineapple and mixed fruit in North Asia.
Maintain BUY with a higher TP of S$0.62 from S$0.60. Our FY22e PATMI has been raised slightly by 2% to US$88.2mn, as we increase our sales forecasts for Americas, but lower our sales forecasts for Asia Pacific, in line with lower revenue in 2Q22 from the Philippines, due to a high base from impact of the pandemic in 2Q21.











(Non-SGX Report) Del Monte Pacific Limited - Strong Growth Momentum in the US

Singapore

Del Monte Pacific is a global branded food and beverage company that manufactures, processes, markets, and distributes a diverse range of products including packaged fruits, vegetables, tomato-based items, sauces, condiments, juices, and fresh and frozen pineapples. The company operates under brands such as Del Monte, S&W, Contadina, and College Inn. It was incorporated in 1999 and is headquartered in Road Town, British Virgin Islands.

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Del Monte Pacific (DELM SP)

Del Monte Pacific: Interest Costs Weigh On Financials

This is not the company to recommend in the midst of the current macroeconomic backdrop. One wonders if the company needs to tap the market for...

David Blennerhassett

Hongjiu Fruit IPO: A Bitter Fruit

The fundamentals are uninspiring as it is delivering profitable growth with a heavy cash burn. Investors can likely avoid a bitter aftertaste by...

Arun George

(Non-SGX Report) Del Monte Pacific Limited - Temporary Dip in Margins

Non- SGX Report: These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external...

Singapore Exchange Ltd (SGX)

Smartkarma Corporate Webinar | Del Monte: Transformation of a Heritage Food Company

On 15 March, 5pm SGT, join our Corporate webinar with Del Monte Pacific's Ignacio Sison and Jennifer Luy, speaking with Nicolas Van Broekhoven...

Smartkarma Research

(Non-SGX Report) Del Monte Pacific Limited - Strong Growth Momentum in the US

Non- SGX Report: These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external...

Singapore Exchange Ltd (SGX)

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