CORPORATE FINANCE
San Miguel Food and Beverage, Inc. (FB), formerly San Miguel Pure
Foods Company, Inc., was incorporated on October 31, 1956 to
primarily engage in the business of manufacturing and marketing of
processed meat products. FB, through its subsidiaries, later on
diversified into poultry and livestock operations, feeds and flour milling,
dairy and coffee operations, franchising and young animal ration
manufacturing and distribution.
In 2018, FB amended its primary purpose and changed its corporate
name to the present one to reflect its expansion into the alcoholic and
non-alcoholic beverage business. In the same year, the Securities and
Exchange Commission approved the increase in authorized capital stock
of FB, by virtue of which FB issued new common shares to its
intermediate parent San Miguel Corporation (SMC) in exchange for
SMC's common shares in San Miguel Brewery Inc. (SMB) and Ginebra
San Miguel Inc. (GSMI), completing the consolidation of the food and
beverage businesses of SMC under FB.
As a result, FB is now operating in three business segments: beer and non-alcoholic beverages, spirits and
food. Among the brands in its portfolio include "Magnolia" for chicken, ice cream and dairy products;
"Monterey" for fresh and marinated meats; "Purefoods" for refrigerated processed meats and canned
meats; "Star" and "Dari Crème" for margarine; "San Mig Coffee" for coffee; "La Pacita" for biscuit and
flour-based snacks; "-Meg" for animal feeds; and "San Miguel Pale Pilsen" and "Ginebra San Miguel" for
alcoholic beverages.
Aside from SMB and GSMI, FB's subsidiaries include San Miguel Foods, Inc.; San Miguel Mills, Inc.;
The Purefoods-Hormel Company, Inc.; Magnolia, Inc.; and San Miguel Super Coffeemix Co., Inc.
Source: SEC Form 17-A (2021)
Universal Robina Corporation (URC) was founded in 1954 when Mr. John
Gokongwei, Jr. established Universal Corn Products, Inc., a cornstarch
manufacturing plant in Pasig. The Company is involved in a range of foodrelated businesses, including the manufacture and distribution of branded
consumer foods; production of hogs and poultry; manufacture of animal feeds
and veterinary products; flour milling; and sugar milling and refining. URC
also ventured in the renewables business for sustainability through distillery
and cogeneration divisions.
URC operates its food business through operating divisions and whollyowned or majority-owned subsidiaries that are organized into three core
business segments, namely, branded consumer foods, agro-industrial products
and commodity food products.
Majority of URC's branded consumer foods business is conducted in the
Philippines, but the Company has expanded into other Asian markets through
its subsidiaries in Cayman Islands, British Virgin Islands, China, Hong Kong,
Indonesia, Malaysia, Singapore, Thailand, Myanmar, Vietnam, New Zealand,
and Australia.
Source: SEC Form 17-A (2021)
Nature of Business
The company and its subsidiaries are involved in poultry and livestock
operations, feeds and flour milling, dairy and coffee operations,
franchising and young animal ration manufacturing and distribution. The
firm sells and markets its products under B-meg, Magnolia, Monterey,
San Miguel Mills, Pure foods, Hungry Juan brand names. Its operating
segments include Beer and non-alcoholic beverages (NAB), Spirits, and
Food. The company generates maximum revenue from Food segment.
The Company is involved in a range of food-related businesses,
including the manufacture and distribution of branded consumer
foods; production of hogs and poultry; manufacture of animal feeds
and veterinary products; flour milling; and sugar milling and refining.
Share Price & News
Return vs Industry: Both Company exceeded the PH Food Industry which returned 2.4% over the past year.
Return vs Market: Both Company exceeded the PH Market which returned 5.6% over
the past year
Stable Share Price: URC is not
significantly more volatile than the rest of
PH stocks over the past 3 months,
typically moving+/- 5% a week.
Stable Share Price: FB is less
volatile than the rest of PH stocks
over the past 3 months, typically
moving+/- 2% a week.
Votality over Time: URC weekly
volatility (5%) has been stable over the
past year.
Votality over Time: FB weekly
volatility (2%) has been stable over
the past year.
Valuation
Below Fair Value: URC (P126.6) is trading
above estimate of fair value (P113.68)
Below Fair Value: URC (P126.6) is trading
above estimate of fair value (P113.68)
Significantly Below Fair Value: URC is
trading above estimate of fair value
Significantly Below Fair Value: URC is
trading above estimate of fair value
PE vs Industry: URC is poor value based on its
Price-to-Earning Ratio (19.8x) compared to the PH
Foof Industry average (13.1x)
PE vs Industry: FB is poor value based on its
Price-to-Earning Ratio (13.8x) compared to the PH
Foof Industry average (13.1x)
PE vs Market: URC is poor value based on its
Price-to-Earning Ratio (19.8x) compared to PH
Market (11.1x)
PE vs Market: FB is poor value based on its
Price-to-Earning Ratio (13.8x) compared to PH
Market (11.1x)
Past Performance
Financial Health
Dividend
Observation:

Based on the data (section 5.1) as of March 31, 2023, San Miguel Food and Beverage
(FB) has a meaningful with a revenue of P281.635b/year, likewise Universal Robina
Corporation (URC) with a revenue of P152.428b/yr. In terms of earnings they have a
high quality of earnings, FB earnings was P21.745b/year and URC with P13.897b/yr.
Which seems FB’s profit margin of 7.7% was improved and became profitable on the
other hand URC with 9.1% decreased but not substantially. Forecast to achieve
profitability both company is currently profitable.

FB Earnings are forecast to grow by an average 0f 12.5% per year for the next 3 years
while URC forecast to grow by an average of 11% (Section 4.1).

In terms of good financial position FB and URC debt level is low and not considered a
risk (section 6.2). Dividend of URC is too low to be concern and on the other hand FB
has dividend of 4.17% seems not well covered to sustain (section 7.2).

Both URC and FB share price has been stable over the past three months (section 2.1)