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September 22, 2017

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Foreign brokerages increase target prices for shares of Uni-President

TAIPEI--Two foreign brokerages have raised their target prices for shares of Taiwan's leading food maker, Uni-President Enterprises Corp., amid rising optimism over the company's bottom line in 2014.

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 "equalweight" and raised its target price on the stock to NT$62.7 (US$2.07) from NT$57.1.

Shares of Uni-President fell 0.59 percent to close at NT$50.30 on the Taiwan Stock Exchange Friday. The benchmark weighted index ended 0.17 points higher at 8,713.96.

Uni-President has been dubbed as one of the "China concept stocks" because of the massive scale of its operations in China.

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

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 arch rival Master Kong brand products loses some of its intensity.

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

As a result, the brokerage has raised its forecast of Uni-President's earnings per share for 2014 and 2015 by 8 percent and 15 percent, respectively, to NT$2.98 and NT$3.39.

In the first nine months of 2013, Uni-President posted NT$2.13 in EPS, up from NT$1.96 in EPS 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., in which Uni-President holds a 70.5 percent stake, to see its earnings for 2014 rise 29 percent from a year earlier, which will boost the parent company's profitability.

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