MANILA/SINGAPORE — Philippine liquor group Emperador conducted a secondary listing on the Singapore Exchange on Thursday as it seeks to ramp up international expansion.
Emperador says its move is the first by a Philippine Stock Exchange-listed company. The listing by way of introduction doesn’t raise new capital but does allow investors in the regional financial hub to trade Emperador shares.
The company said this week that “investment banks have been mandated to explore ways to introduce liquidity” to the listing.
“This will expand opportunities for participation by investors in Singapore and beyond as we continue to invest in our ambitious international expansion,” company President Winston Co said.
Emperador is the largest liquor company in the Philippines, and is part of tycoon Andrew Tan’s Alliance Global Group, which owns real estate developer Megaworld, Resorts World Manila casino and the Philippine operations of McDonald’s.
Emperador’s eponymous brandy is the world’s bestselling by volume, thanks to its domestic popularity. In 2020, the company produced 23.6 million cases of brandy, according to U.K.-based industry magazine Drinks International.
Emperador raised its international profile in 2014 when it acquired Scotch whisky maker Whyte and Mackay, which was divested by United Spirits after a takeover by Diageo to satisfy antitrust concerns. It then purchased Spanish brandy and sherry wine assets, giving the company a toehold in Europe and Latin America.
Speaking to Nikkei Asia in Singapore on Thursday, Bryan Donaghey, CEO of Whyte and Mackay, said the listing in the city-state can help to raise the profile of Emperador among investors in the region, using the financial hub as a focal point.
“The priority focus is really the profile of the business with the investor community right now,” he said. “We’re not just a Philippine company anymore, we’re an international company and it’s [about] getting an appreciation of that, and getting that communicated to global investors.”
Emperador, whose products are sold in over 100 countries, aims to raise the share of international sales to 50% by 2025, from about 35%. It plans to deepen its presence in Africa and China, Glenn Manlapaz, head of Emperador’s international unit, told Nikkei Asia in April.
The company is also open to more mergers and acquisitions, Manlapaz said. “We will continue to expand and grow our brands globally, and we will always explore M&A opportunities.”
In May, the company said it was nearly doubling its capital expenditure this year to 3 billion pesos ($53 million), mainly to grow international business.
Emperador managed to grow sales and profit during the pandemic. Revenue rose 5.9% to 55.9 billion pesos last year, while profit jumped 26.3% to 10.1 billion pesos as international sales expanded.
Yet shares of the company, which rejoined the blue-chip PSE index in February, have been hit harder by the global equities rout and rising inflation that has battered consumer companies.
Emperador’s stock price has fallen by 16.3% so far this year, worse than the benchmark PSE index, which has dropped by 12.2%.
“As far as the outlook for liquor is concerned, I think we are going to have a difficult time onwards [due to] higher inflation,” said Cristina Ulang, head of research at First Metro Investment. But Ulang noted the tough times for Emperador’s stock may be temporary. “People need to enjoy life. We can’t remove liquor in parties,” she said.
Singapore has become a hot spot for spirits investors in Southeast Asia, with companies eyeing wealth in the country as a promising segment for the growth of their businesses.
Last year, Hong Kong-based Rare Finds Worldwide, which manages a whiskey brokerage, announced the launch of its service in Singapore, targeting professional investors, family offices and high net-worth individuals.
The company gives its clients the opportunity to buy into some of the oldest and most prestigious single malts in the world from top-tier Scottish distilleries including Macallan, Dalmore and Bowmore.
Earlier this month, the Whisky Cask Club, based in the city-state, announced the launch of a new fund that allows investors to buy into premium whiskey casks, stressing that these casks have shown a consistent annual return of 15% to 20%, considering the lack of supply of aged single malt Scotch whisky and growing global demand.
“We chose to set up the Whisky Cask Club in Singapore because it’s perfectly positioned to capitalize upon the growing consumption of whisky in Asia,” said Matthew Lim, a partner at Whisky Cask Club. “Singapore’s diverse population and the ease of doing business here make it an ideal location.”