Citigroup: San Miguel Brewery a buy


Posted at Jun 20 2008 10:45 AM | Updated as of Jun 20 2008 06:45 PM


MANILA - Citigroup issued a buy recommendation on San Miguel Brewery, the Philippines' biggest brewer, as it started coverage of the stock, with a target price of 10.3 pesos (23 US cents).

The stock closed on Thursday at 8.40 pesos.

Citigroup said in a research note it sees profitability upside in San Miguel Brewery, the crown jewel in the empire of Southeast Asia's biggest food and drinks conglomerate San Miguel and the biggest IPO so far this year, despite a mature domestic market.

A better product mix and reduced costs pressures, partly due to its alliance with Japanese brewer Kirin, will drive profits in the company, Citigroup said.

Citigroup said its target P/E multiple for San Miguel Brewery of 15.3 times is at a 15 percent discount to global peers.