- We maintain our OUTPERFORM rating and keep our target price (TP) relatively unchanged. This is mainly due to (1) an increase in sugar’s forecasted 2024 earnings of 29%, offset by (2) our cut of 10% in soy milk’s 2024 earnings following lower-than-expected results in 2023, in addition to a lower target sugar equity value from the replacement value method. We also increase our dividend forecast as management expected to increase the 2023 dividend payout ratio vs the previous year following strong 2023 business results.

- Meanwhile, we increase our aggregate 2024-26 NPAT-MI forecast by 16%, mainly due to a higher earnings projection for the sugar business in 2024, as we expect the softening sugar ASP to be outweighed by higher sugar volume production forecasts given a better-than-expected 2023/24 harvest season. Over the long term, we believe the less volatile soy milk business will have its GPM recover in 2024-25 from 2023’s bottom and remain the key profit driver for QNS.

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