Daily Brief Consumer: TORIDOLL Holdings Corporation, Ginebra San Miguel , TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Toridoll (3397): Restaurant Chain on a Lege
Ginebra San Miguel (GSMI PM): Gleanings From The Last 12 Years of Annual Reports and Q1 2024 Bonanza
Shareholder Returns Will Increase over June AGM, but Will Companies Hold up with Sluggish ROE?

Toridoll (3397): Restaurant Chain on a Lege

Macro trends for restaurant chains are all negative: Food prices rising faster than restaurant unit prices, part-time wages rising faster than full-time.
Toridoll’s same store sales resuming long-term underperformance trend that was broken only briefly during the pandemic.
Stock trades at 3x the market average PBR, despite merely average RoE. Technical support has broken down.

Ginebra San Miguel (GSMI PM) is a monopoly in the gin business in the Philippines with a 97% marketshare trading at 7x PE FY24 ( 10-Yr Revenue CAGR 15% YoY).
After its Q1 results, it has 32% of the market cap in net cash and investments, a dividend yield of>7%, and a 5/10 Yr average ROCE of 37%/22%.
We summarize what we learned from the annual report released on April 15th. We saw a long-term trend of increasing prices, consistent margin growth, balance sheet improvement, etc.

In addition to too much cash on hand to begin with, ROE is expected to continue to grow at a sluggish pace, as shareholder returns are less than profit growth.
Given that we expect more companies to have stock price, P/B, and ROE on the agenda for the June AGM, more companies are expected to announce increases in shareholder returns.
However, ROE is unlikely to increase significantly. Shareholder returns are certainly too small, but a more serious problem is the inability to find growth investment opportunities.

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