CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Equity Bottom-Up

We maintain our SELL recommendation but increase our target price to Bt14.50 (previously Bt12.20), implying a downside of 21% from the current price. We derive our target price from a 30% premium to the 2022E PB/ROE ratio of Asia ex Japan Consumer Staples due to RBF’s resilient business model.
Investment thesis:
<ul>
<li>Aggressive expansion to capture overseas growth opportunities, but already priced in</li>
<li>Strengthened relationship to Japanese partner enables profit boost</li>
<li>Legalization of hemp provides a new growth catalyst</li>
</ul>
Interim: Revenue continued to grow in 1Q21, up 5% YoY. Recent information about RBF’s role in the hemp industry turned out to be a growth catalyst. With two crops a year, RBF can add up to Bt1.2bn revenue annually, and existing segments are fast-growing.
Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers.

We maintain our SELL recommendation but increase our target price to Bt14.50 (previously Bt12.20), implying a downside of 21% from the current price. We derive our target price from a 30% premium to the 2022E PB/ROE ratio of Asia ex Japan Consumer Staples due to RBF’s resilient business model.
Investment thesis:

Aggressive expansion to capture overseas growth opportunities, but already priced in
Strengthened relationship to Japanese partner enables profit boost
Legalization of hemp provides a new growth catalyst

Interim: Revenue continued to grow in 1Q21, up 5% YoY. Recent information about RBF’s role in the hemp industry turned out to be a growth catalyst. With two crops a year, RBF can add up to Bt1.2bn revenue annually, and existing segments are fast-growing.
Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers.

RBF: Great Growth Potential but at a High Price

We revise our recommendation to SELL from HOLD but increase our target price to Bt12.20, implying a downside of 19% from the current price. We derive our target price from a 30% premium to the 2021E PB/ROE ratio of Asia ex Japan Consumer Staples due to RBF’s resilient business model.
Investment thesis:
<ul>
<li>Aggressive expansion to capture overseas growth opportunities, but already priced in</li>
<li>Strengthened relationship to Japanese partner enables profit boost</li>
<li>Legalization of hemp provides a new growth catalyst</li>
</ul>
Interim: A strong 4Q20 YoY where revenue grew by 9%, and gross profit margin expanded 1.4 ppts. We adjust our revenue forecast upward as the legalization of hemp in Thailand affects the growth prospects of RBF positively.
Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers.

We revise our recommendation to SELL from HOLD but increase our target price to Bt12.20, implying a downside of 19% from the current price. We derive our target price from a 30% premium to the 2021E PB/ROE ratio of Asia ex Japan Consumer Staples due to RBF’s resilient business model.
Investment thesis:

Aggressive expansion to capture overseas growth opportunities, but already priced in
Strengthened relationship to Japanese partner enables profit boost
Legalization of hemp provides a new growth catalyst

Interim: A strong 4Q20 YoY where revenue grew by 9%, and gross profit margin expanded 1.4 ppts. We adjust our revenue forecast upward as the legalization of hemp in Thailand affects the growth prospects of RBF positively.
Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers.

RBF: Hemp Hype Drives Stock Price Too High

We keep our HOLD recommendation on RBF and reduce our target price to Bt8.70 from Bt9.25, implying a downside of 8% from the current price. We derive our target price from a 30% premium to the 2021E PB/ROE ratio of Asia ex Japan Consumer Staples due to RBF’s resilient business model.
Investment thesis:
<ul>
<li>Aggressive expansion to capture overseas growth opportunities, but already priced in</li>
<li>Strengthened relationship to Japanese partner enables profit boost</li>
<li>Improved raw material management enhances cost-efficiency</li>
</ul>
Interim: A strong 3Q20 YoY where revenue grew by 21%, and gross profit margin expanded 2.2 ppts. We adjust our overall gross margin forecast upward but stay cautious about high growth opportunities in the long run.
Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers.

We keep our HOLD recommendation on RBF and reduce our target price to Bt8.70 from Bt9.25, implying a downside of 8% from the current price. We derive our target price from a 30% premium to the 2021E PB/ROE ratio of Asia ex Japan Consumer Staples due to RBF’s resilient business model.
Investment thesis:

Aggressive expansion to capture overseas growth opportunities, but already priced in
Strengthened relationship to Japanese partner enables profit boost
Improved raw material management enhances cost-efficiency

Interim: A strong 3Q20 YoY where revenue grew by 21%, and gross profit margin expanded 2.2 ppts. We adjust our overall gross margin forecast upward but stay cautious about high growth opportunities in the long run.
Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers.

RBF: Strong Performance and Resilience Are Already Priced In

We upgrade our recommendation on RBF to HOLD from SELL based on raising our target price of 9.25 from Bt8.70, implying a downside of 9% from the current price. We derive our target price from a 20% premium to the 2020-21E PEG ratio of Thai Consumer Staples due to RBF’s resilient business model.
Investment thesis:
<ul>
<li>Aggressive expansion to capture overseas growth opportunities, but already priced in</li>
<li>Strengthened relationship to Japanese partner enables profit boost</li>
<li>Improved raw material management enhances cost-efficiency</li>
</ul>
Interim: As expected, the 2Q20 results underline RBF’s resiliency during an economic downturn. Given the substantial revenue and net profit growth, we become a bit more optimistic for 2020E-2021E, but we still miss a catalyst for further outperformance.
Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers

We upgrade our recommendation on RBF to HOLD from SELL based on raising our target price of 9.25 from Bt8.70, implying a downside of 9% from the current price. We derive our target price from a 20% premium to the 2020-21E PEG ratio of Thai Consumer Staples due to RBF’s resilient business model.
Investment thesis:

Aggressive expansion to capture overseas growth opportunities, but already priced in
Strengthened relationship to Japanese partner enables profit boost
Improved raw material management enhances cost-efficiency

Interim: As expected, the 2Q20 results underline RBF’s resiliency during an economic downturn. Given the substantial revenue and net profit growth, we become a bit more optimistic for 2020E-2021E, but we still miss a catalyst for further outperformance.
Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers

RBF: The Excessive Outperformance May Come to a Halt

We initiate coverage on RBF with a SELL recommendation based on a target price of Bt8.70, implying a downside of 13% from the current price. We derive our target price from a 20% premium to the PEG ratio of Thai Consumer Staples due to RBF’s resilient business model.
Investment thesis:
<ul>
<li>Aggressive expansion to capture overseas growth opportunities, but already priced in</li>
<li>Strengthened relationship to Japanese partner enables profit boost</li>
<li>Improved raw material management enhances cost-efficiency</li>
</ul>
Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers.

We initiate coverage on RBF with a SELL recommendation based on a target price of Bt8.70, implying a downside of 13% from the current price. We derive our target price from a 20% premium to the PEG ratio of Thai Consumer Staples due to RBF’s resilient business model.
Investment thesis:

Aggressive expansion to capture overseas growth opportunities, but already priced in
Strengthened relationship to Japanese partner enables profit boost
Improved raw material management enhances cost-efficiency

Risks: Slowdown in consumer spending, increased competition, delays and disruptions in production, failure to introduce innovative products, loss of large customers.

RBF: Recent Jump in Share Price Leads to Overvaluation

Thailand

R&B Food Supply Public Company Limited manufactures and trades in bread products, colors, fragrances, and chemicals utilized in the food, beverage, and consumer product industries. The company also produces and sells products under its own brands, including Uncle Barns', Best Odour, and Super-Find. It is headquartered in Bangkok, Thailand, and was founded in 1989.

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R&B Food Supply (RBF TB)

RBF: Great Growth Potential but at a High Price

We maintain our SELL recommendation but increase our target price to Bt14.50 (previously Bt12.20), implying a downside of 21% from the current price.

A. Stotz Investment Research

RBF: Hemp Hype Drives Stock Price Too High

We revise our recommendation to SELL from HOLD but increase our target price to Bt12.20, implying a downside of 19% from the current price.

A. Stotz Investment Research

RBF: Strong Performance and Resilience Are Already Priced In

We keep our HOLD recommendation on RBF and reduce our target price to Bt8.70, implying a downside of 8%. We derive our target price from a 30%...

A. Stotz Investment Research

RBF: The Excessive Outperformance May Come to a Halt

Given the substantial growth, we become a bit more optimistic for 2020E-2021E, but we still miss a catalyst for further outperformance.

A. Stotz Investment Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

RBF: Great Growth Potential but at a High Price

We maintain our SELL recommendation but increase our target price to Bt14.50 (previously Bt12.20), implying a downside of 21% from the current price.

A. Stotz Investment Research

RBF: Hemp Hype Drives Stock Price Too High

We revise our recommendation to SELL from HOLD but increase our target price to Bt12.20, implying a downside of 19% from the current price.

A. Stotz Investment Research

RBF: Strong Performance and Resilience Are Already Priced In

We keep our HOLD recommendation on RBF and reduce our target price to Bt8.70, implying a downside of 8%. We derive our target price from a 30%...

A. Stotz Investment Research

RBF: The Excessive Outperformance May Come to a Halt

Given the substantial growth, we become a bit more optimistic for 2020E-2021E, but we still miss a catalyst for further outperformance.

A. Stotz Investment Research

RBF: Recent Jump in Share Price Leads to Overvaluation

We initiate coverage on RBF with a SELL recommendation based on a target price of Bt8.70, implying a downside of 13% from the current price. We...

A. Stotz Investment Research