Suntory Beverage & Food Limited (STBFY)
OTC PINK OTC PINK Primary Summary
Suntory Beverage's Potential For Margin Expansion Offers Opportunity
Suntory Food & Beverage offers a stable, diversified portfolio of strong regional brands and operates with no material debt, reducing financial risk. The company trades at a relatively inexpensive valuation compared to U.S. peers, providing a margin of safety for investors. Upcoming price increases in Japan and potential improving shareholder focus could boost margins and support future growth, despite recent volume softness.
Suntory: A Buy On Higher Prices And Lower Costs
Suntory is projected to achieve a +13% EBIT growth in 2025, driven by higher product prices and cost optimization measures. Suntory's strong market position in Japan allows it to implement price hikes without significantly impacting sales volume. Suntory can manage raw material costs by altering packaging and product line-ups, which would enhance profitability.
Suntory Beverage & Food: Eyes On Profitability Improvement, Capital Allocation
Suntory's operating profit surged 17.6% YoY in 1H 2024, driven by successful cost management and product mix optimization in Japan. Suntory plans to raise its dividend payout ratio to 40% and invest JPY 300-600 billion in capital investments for the FY 2024-2026 period. My rating for Suntory Beverage is a Buy, taking into account the profitability improvement for its Japanese operations and the company's balanced capital allocation approach.
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Suntory Beverage & Food Limited Profile
| Beverages Industry | Consumer Staples Sector | Ms. Makiko Ono CEO | OTC PINK Exchange | 86803T104 CUSIP |
| JP Country | 23,000 Employees | - Last Dividend | - Last Split | - IPO Date |
Overview
Suntory Beverage & Food Limited, a prominent entity in the beverage and food industry, was founded in 2009 and operates under the umbrella of Suntory Holdings Limited. Its headquarters are located in Tokyo, Japan. The company specializes in both alcoholic and non-alcoholic beverages, as well as foods, catering to a diverse global market that includes Japan, Asia-Pacific, Europe, and the Americas. Emphasizing quality and variety, Suntory Beverage & Food Limited has etched a significant mark on the industry, offering a wide range of products that meet the varying needs and preferences of its customers.
Products and Services
- Mineral Water: Marketed under the brand "Suntory Tennensui," this product highlights the company’s commitment to offering pure and refreshing mineral water sourced from nature’s finest reserves.
- Coffee Drinks: With the "BOSS" brand, Suntory provides a rich and diverse variety of canned coffee drinks, catering to the tastes of coffee enthusiasts everywhere.
- Tea Drinks: Including "Suntory Green Tea Iyemon" and "Suntory Green Tea Iyemon Tokucha (FOSHU)," these tea drinks are crafted for health-conscious consumers, combining the traditional taste of green tea with modern health benefits.
- Carbonated Drinks: Offering a fun and fizzy drinking experience, products like "C.C.Lemon" and "Pepsi Big" cater to consumers looking for refreshing carbonated beverages.
- Sports Drinks: Addressing the hydration and energy needs of athletes and active individuals, "GREEN DAKARA" is an example of Suntory’s sports drink offerings.
- Food for Specified Health Uses: Under brands like "Suntory Green Tea Iyemon Tokucha (FOSHU)," the company ventures into health-focused food and drink options, catering to those seeking dietary support for specific health conditions or wellness goals.
- Global Brands: Suntory also offers an array of globally recognized beverage brands, including "Orangina," "Oasis," "Lucozade," "Ribena," "Schweppes," "MayTea," "TEA+," "MYTEA Oolong Tea," "Sting," "Okky," "goodmood," "BRAND'S Essence of Chicken," "V," and "Nature's Twist." These brands exemplify the company’s international reach and its capability to cater to global tastes and preferences.
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