Mon, Mar 10, 2014 - Page 14 News List

Uni-President optimism drives up target prices

Staff writer, with CNA

Two foreign brokerages have raised their target prices for shares of Taiwan’s leading food maker, Uni-President Enterprises Corp (統一企業), amid rising optimism over the company’s bottom line this year.

In a recent research note, Barclays Capital said Uni-President’s earnings were likely to rise this year because of an anticipated recovery in the restaurant business and easing price competition in China’s instant noodle and beverage markets.

The brokerage has upgraded its recommendation on shares of Uni-President to “overweight” from “equal weight” and raised its target price on the stock to NT$62.7 from NT$57.1.

Uni-President shares fell 0.59 percent to close at NT$50.30 on Friday.

Beyond extensive manufacturing operations, the company also invests in Starbucks, Mister Donut and 7-Eleven stores in Shanghai, and Carrefour outlets in Chongqing and Tianjin, China.

It also ranks as the second-largest ready-to-drink tea and instant noodle supplier and the third-largest diluted juice supplier in China, and Barclays expected income from those businesses to increase as a price war with rival Master Kong (康師傅) brand products loses some of its intensity.

Because Taiwan’s economy is on the way to recovery, Uni-President’s local restaurant and retail operations are also set to improve this year, Barclays said.

As a result, the brokerage has raised its forecast of Uni-President for this year and next year by 8 percent and 15 percent respectively, to NT$2.98 and NT$3.39.

In the first nine months of last year, Uni-President posted NT$2.13 in earnings per share, up from NT$1.96 recorded over the same period a year earlier.

Holding a similar upbeat mood about Uni-President’s earnings prospects, Daiwa Securities said it has raised its target price for the stock to NT$59 from NT$57, while upgrading its recommendation to “outperform” from “hold.”

Daiwa Securities said it expected Uni-President China Holdings Ltd (統一中國控股), in which Uni-President holds a 70.5 percent stake, to see its earnings for this year rise 29 percent from a year earlier, which will boost the parent company’s profitability.

Daiwa also said Uni-President shares should also benefit from bargain hunting because they have been lagging behind the broader market, and it suggested that it was time for investors to raise their holdings in the stock.

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