‘Century Tuna’ maker CNPF to have Initial Public Offering (IPO)



The company making popular canned meat brands Century Tuna and Argentina Corned Beef is scheduled to be the second company this year to conduct an Initial Public Offering.

Century Pacific Food Inc. (CNPF) is offering up to 229.65 million shares to the public, priced at no more than P14.50 (final price will be announced later today). At this offer price, the company is expected to raise around P3.3 billion.

[Update: The final IPO price has been announced and is set to be P13.75 per share. This means Century Pacific will raise as much as P3.16 billion from the IPO.]

According to the company, it intends to use proceeds of the IPO to finance capital expenditures, pursue potential opportunistic acquisitions, retire debt and support working capital.

Investors may start picking up shares during the offer period scheduled from April 23 to 29. The stock will be listed and will start trading in the Philippine Stock Exchange (PSE) on May 6.

Is it profitable to invest in an IPO?

There is no certainty if an IPO can make you money. In the past, several companies conducted an IPO and had their stock prices shot up immediately, giving instant profits to investors.

In the case of the first IPO of the year, Double Dragon Properties (DD), the stock price rose 50% during its first trading day. (See Double Dragon reaches price ceiling on 1st trading day) The stock currently trades at P3.99 per share — almost a 100% return on its IPO price of P2.00.

Still, there had been instances when stock prices decline after the IPO, taking months or even years to recover. In the case of Cebu Air Inc. (CEB), owner of carrier Cebu Pacific, although the stock price rose during its first trading days, its price has plunged since and still has not recovered since September 2010. As of last week’s trading, the CEB stock trades at P49.65 apiece, more than 60% below its IPO price of P125.00. (See Cebu Pacific IPO in September 2010)

Should you invest in the Century Pacific IPO?

There are no tried and tested formulas to determine if a company’s IPO is worth investing in. But it helps to have guidance from the country’s top stock brokerage firms.

One useful source of information is PinoyInvestor, a premium stocks resource that consolidates stock picks, company analyses, and broker reports from seven (7) of the Philippines’ top stock brokers.

In this week’s issue, the PinoyInvestor Stocks Report offers a comprehensive analysis and recommendation on the upcoming IPO of Century Pacific Food Inc., prepared by one of their partner brokers Unicapital Securities.

Here are excerpts from the Century Pacific IPO analysis in PinoyInvestor:

Century Pacific’s Financial Analysis

Huge part of the company’s revenue is accounted by the Canned and Processed Fish segment followed by Export Tuna segment, which both have low before tax return on sales. The Canned Meat segment is the most profitable among the four segments.

Century Pacific’s Debt-to-Equity (D/E) ratio stood at 1.87x. The IPO proceeds will eliminate PHP 1.29 billion in CNPF’s liabilities, which will bring down the D/E ratio to around 1.40x.

If you want to get the complete and comprehensive analysis of this IPO, sign up to PinoyInvestor.

Registration is free and Free Version members receive weekly Stock Reports with top picks, stock recommendations, and Target Prices, plus access to the PinoyInvestor Academy, a collection of investor education resources available for free.

Must read these other interesting and useful articles: 

About the Author

PSEi support seen at 6,200 and 6,000 amid weaker Peso

In a not-so-surprising move, the U.S. Federal Reserve (Fed) yesterday raised interest rates by 75 basis points (bps) or 0.75% in a bid to tame rising inflation in the United States. This was the third consecutive 0.75% rate hike by the Fed, which brings the federal funds rate, the central bank’s benchmark interest rate, to ... Read more

Official SWIFT Code of BDO, BPI, Metrobank, Philippine banks

When sending cash remittances or wire transfer to a bank account in the Philippines (such as BDO, BPI, Metrobank, Landbank, DBP, etc.), you’ll surely need the SWIFT Code of the bank. Look no further because you can find all the SWIFT Codes you need in this list! Make sure you’re using the right bank code ... Read more
blank

How to Waive your Credit Card Annual Fee (BDO, BPI, Metrobank, RCBC, Citibank, UnionBank)

Without a doubt, one of the most annoying fees that credit cardholders have to pay is the annual fee. Majority of cardholders are familiar with this fee and majority of us likely pay this grudgingly year after year after year. In the case of my credit card with BPI (Bank of the Philippine Islands), I’m ... Read more
blank

Why Filipinos do not become business owners or entrepreneurs

For a majority of Filipinos, entrepreneurship does not seem to be a typical, expected path. This is not surprising, considering that in school, students are primarily taught to become employees after graduation. Students train for years to become staff workers, reporting to a supervisor, and just waiting to receive their wages or salaries every month. ... Read more
blank

My experience investing in Mutual Funds in the Philippines

I started investing in mutual funds when I was 22 years old. As an Overseas Filipino Worker (OFW) then, I was fortunate to be able to save some money at that young age because of my work abroad. One time while I was on vacation in the Philippines, I saw a large billboard in EDSA ... Read more
blank

Income Tax Tables in the Philippines (2022)

The Philippines’ new tax reform bill, known as TRAIN or Tax Reform for Acceleration and Inclusion, was signed into law on December 19, 2017 and its implementation began on January 1, 2018. What are the new income tax rates under the TRAIN law? How will TRAIN affect income taxes of individuals and corporations? How is the ... Read more
blank

PSE Stocks Performance under each Philippine President (1987-2021)

Did you know that Philippine stocks were able to achieve an astounding growth of 800% in a span of 30 years? From 1987 until 2018, the Philippine Stock Exchange index (PSEi) rose from 1,000 points to a peak of 9,000 points — generating a return of 800% over 30 years. (The PSEi is an index ... Read more
blank

SSL 2022: Salary Increases for Teachers, Nurses, Gov’t Employees

Good news to all government employees! There’s a new round of salary increases beginning January 1, 2022! Millions of employees of the Philippine government — including public school teachers, nurses and staff of government hospitals, and workers in local and national government agencies, etc. — will be getting an automatic salary adjustment this 2022 under ... Read more
blank

PSE Trading Hours in 2022: What time open, when closed?

Before you take the plunge into stock trading and investing, make sure you understand what stocks are and how the Philippine Stock Exchange (PSE) operates. Unlike other investments that are relatively safe, stock trading is risky and loss of money is a possibility. So before you deep dive into the exciting world of stock trading, ... Read more

Price Floor and Price Ceiling of PSE Stocks

Trading bands in the PSE come in two forms: Price Ceiling, or the upper price limit, and Price Floor, or the lower price limit.

6 thoughts on “‘Century Tuna’ maker CNPF to have Initial Public Offering (IPO)”

  1. I’m barely new in stocks trading, is it too negative from the investor’s to know that part of the proceeds from IPO will be use for their short-term debt payments? And, is it perhaps the reason why it’s subscription is not highlighted by the media compare to DoubleDragon?

    Reply
  2. thanks @noynoyingalways:disqus and @jamescampero:disqus for your views. I think i’m staying away from this IPO. tsupitero experts seem not to get into this.

    Reply

Leave a Comment