PhillipCapital has replaced Thai Beverage Public Co with Del Monte Pacific in its current list of “Absolute 10 Model Portfolio”. For analyst Vivian Ye, her pick of Del Monte Pacific is based on how the consumer foodstuff maker took a turn for the better as the result of a restructuring exercise.
Back in 2014, Del Monte Pacific acquired its current US subsidiary, which focused mainly on producing low-margin canned food for the likes of Walmart or Costco. In 2018, a new management team chose to transform the business. They closed down loss-making operations and significant restructuring costs had to be booked till FY2020.
However, as the company shifts towards a higher-margin business of selling products under its own brand and introduces new products catering to modern lifestyles such as healthy snacks, Del Monte’s overall earnings have improved tremendously.