We are issuing a BUY recommendation on San Miguel Food and Beverage Inc.

(SMFB) with a one-year

target price of P73— an upside of 17.44% using the Discounted Cash Flow (DCF) method. Despite the challenges
brought about by the ongoing pandemic, SMFB delivered robust financial results last year, demonstrating resilience
in the face of adversity. It shows no signs of backing down its performance as it continues to implement relevant
marketing strategies to strengthen its consumption-generating programs, direct-to-consumer initiatives to further
improve product volumes, and international expansion across different continents worldwide. It is committed to its
long-term goals, sustainable growth, expansion, and continued financial success. Without doubt, SMFB is indeed the
renaissance of the noble giant and one of the largest and most diversified conglomerates in the Philippines, its parent
company, San Miguel Corporation (SMC).
Incorporated in 2018, SMFB is now the leading food and beverage company in the Philippines. It has the
most recognizable and top-of-mind brands in the industry and hold market-leading positions in their respective
categories. Its former name, San Miguel Pure Foods Company Inc., was changed to San Miguel Food & Beverage
Inc. in 2018 to represent the company's expansion into the alcoholic and non-alcoholic beverage business and the
desire to make it easier for the investors to buy into the companies.
Along with the consolidation of food and beverage business is its change in operating segments. The SMFB
has changed from Agro-Industrial, Branded Value-Added, and Milling segments, to Food, Beer, and Non-Alcoholic
Beverages (NAB), and Spirits. The Beer and NAB Division, through San Miguel Brewery, Inc., and Spirits Division,
through Ginebra San Miguel Inc., comprise its beverage business. On the other hand, its Food Division, San Miguel
Foods, is operated through several key subsidiaries such as San Miguel Foods, Inc., Magnolia, Inc., Purefoods-
Hormel Company, Inc. and San Miguel Mills, Inc. The Food and Beer and NAB are the two most contributory
segments in SMFB revenue growth. This is due to the company’s 8% increase or P6,461 million invested in Property,
plant, and equipment for expansion projects for the two segments in 2021. The Spirits business also registered
another record year revenue as it soared P42.5billion last year. This is due to relevant marketing campaigns,
consumer promotions, a broadening distribution network, and efficiencies.
The SMFB serves its customers through an extensive production and distribution network and export their
products to over 70 markets worldwide. It dominates the food and beverage industry surpassing its major
competitors, Universal Robina (URC), Monde Nissin, Century Pacific, and RFM. The domestic domination of SMFB
is beyond measure. Its products are of every household staple committing to its vision to weave its products in the
fabric of everyday lives. SMFB also has a very strong international presence. Its products are consumed in the
United States of America, Canada, Middle East, Australia, New Zealand, and across Asia Pacific.
Aside from SMFB’s focus on business and strong financial results, it is also committed to doing its part in
providing solutions not only for its business advancements, but for the pillars of environment, social, and governance.
*Additional chenelin sa envi social and gov*

AGAIN, WHY BUY SMFB?

(Valuation gist)
It is estimated that its revenue will continue to grow to P424,785 billion at the end of 2027. This growth is
driven by Food, Beer and NAB, and Spirits compromising 67%, 52%, and 19% of the revenue, respectively.
UNSDG
(Investment summary gist)
*because of their place in the market, revenue growth*
*bouncing back after covid*