Uni-President China Earnings: Missed Due to Food Segment; Beverages To Drive Growth in 2023

No-moat Uni-President China posted first-quarter results that slightly missed our expectations on sales and margins. Net profit increased 48% year on year, but fell 30%, excluding one-off land sales gain. We have moderately lowered our top-line and net profit estimates for 2023, as a downward revision in the food segment more than offset a better outlook for beverages. Our fair value estimate remains unchanged at HKD 7.60 per share, which implies 16 times 2023 P/E and is broadly in line with its three-year average. We think the market could be concerned with the food business performance following first-quarter results. We consider the stock fairly valued at its current price, and may lack a near-term catalyst.