FIRST PACIFIC(HK:00142) Sou Hu Cai Jing·2025-04-10 05:55Core Viewpoint - In the context of a slowing global economy and increasing geopolitical tensions in 2024, the company has demonstrated strong performance through quality growth, creating verifiable value from invested capital [1] Group 1: Business Resilience and Profit Quality - The company's core business has shown strong resilience, achieving significant breakthroughs in key metrics despite a complex economic environment. Regular profit increased by 11.4% year-on-year to $672.5 million, marking a four-year high [1] - The consumer food sector has become a major profit driver, with the Indofood brand contributing $333 million to profits, a 17% year-on-year increase. Product innovation and expanded distribution have enhanced profitability [3] - PLDT's business maintained stability with a profit contribution of $149 million, a 4% increase year-on-year, supported by a surge in data demand and operational efficiency [4] - The MPIC infrastructure segment saw a 16% year-on-year profit increase to $495 million, driven by strong energy sales and water price adjustments [4] Group 2: Financial Structure and Long-term Dividends - The company exhibits prudent capital management and strategic foresight, maintaining a healthy financial status with a cash interest coverage ratio above 4 times. Debt levels remain at $1.5 billion, with an average interest rate reduced from 5.4% to 5.1% [5] - Despite currency depreciation concerns, the company's core business has continued to achieve profit growth, supported by a robust structure. The Philippine peso and Indonesian rupiah depreciated by 9% and 11% respectively over the past six years, yet core business profits have consistently increased [5][7] - The company has a solid financial position and ample cash reserves, allowing for sustained dividend distributions. The board proposed a final dividend of 13.5 HK cents per share, an 8% increase year-on-year, with total dividends rising from 23.0 HK cents to 25.5 HK cents [8] Group 3: Growth Sustainability and Market Recognition - The company maintains a long-term dividend payout ratio between 5% and 8%, significantly higher than bank deposits and most fixed-income products, providing stable returns for investors [9] - The company has a history of stable and sustainable dividends, reflecting management's commitment to shareholder returns and effective strategic execution. Moody's and S&P have affirmed stable ratings of Baa3 and BBB- respectively, indicating market recognition of financial resilience [9][10] - The company's growth is characterized by certainty and sustainability, aligning with the traits of a "good company," thus warranting higher expectations from investors [10]