2025-06-12-花旗集团-米内尔瓦（BEEF3）_密涅瓦（BEEF3.SA）_增加上行90天催化因素观察_10页_273kb

Summary of Minerva (BEEF3.SA) Research Report

Core Content

This research report provides an analysis of Minerva (BEEF3.SA), focusing on its short-term performance outlook, valuation, and investment strategy. The report highlights the company's operational momentum and potential for upside in the near term, particularly in the context of its upcoming 2Q25 earnings results.

Main Views

• Investment Rating: Neutral
• Catalyst Watch: Upside, valid for 90 days
• Target Price: R$5.60
• Expected Share Price Return: 10.5%
• Valuation Methodology: Based on a 12-month DCF model with a WACC of 10.5% and a perpetuity growth rate of 1.5%

Key Drivers for Upside Potential

1. Operational Momentum:

   • Minerva is expected to see increased plant utilization from ~45–50% in 1Q25 to ~55–60% in 2Q25, with further growth anticipated by year-end.
   • This should lead to improved sales and EBITDA margins.

2. Export Performance:

   • Robust exports, especially to China and the US, are anticipated to drive revenue growth.
   • Global beef prices are supportive, with SECEX data indicating a positive trend.

3. External Factors:

   • Rising Chinese beef demand amid geopolitical tensions.
   • Declining US beef supply.
   • Brazil poultry disruptions due to avian flu, which may benefit Minerva's operations.

Financial Forecasts

• Sales: R$54bn for FY2025
• EBITDA Margin: Expected to expand to 9.0% for FY2025
• Net Income: Forecasted at R$995M for FY2025
• EPS: Expected to be R$1.00 for FY2025
• Deleveraging: Net Debt/EBITDA is projected to reach 2.8x by YE25, with further improvement in 2H25

Key Information

Revenue Outlook

• 2Q25 Revenue: Expected to be at least R$12bn, representing a +7% QoQ increase
• EBITDA Margin Expansion: Projected to range from 8.5% to 9.0% for FY2025
• Deleveraging: 2Q25 should already show deleveraging, with further progress expected

Valuation Metrics

• EV/EBITDA adj: 3.7x for 2025E
• PE: 5.1x for 2025E
• FCF: Expected to improve from -6.8% in 2025E to 17.5% and 36.9% in subsequent years

Risks and Upside Catalysts

Risks to Target Price

1. Sanitary issues in operating countries
2. Economic deceleration in international markets
3. Higher-than-expected cattle prices affecting COGS
4. Slow domestic market recovery

Upside Catalysts

1. Higher-than-expected BRL depreciation
2. Faster ramp-up of new plants
3. Higher global protein prices

Analyst Information

• Analysts: Renata Cabral and Tiago Harduim, CFA
• Contact Information:
  • Renata Cabral: +55-11-4009-7561 | renata.cabral@citi.com
  • Tiago Harduim: +55-11-4009-7059 | tiago.harduim@citi.com

Investment Strategy

• Rating Justification: The Neutral rating is based on the cattle cycle in Brazil entering a tighter phase of cattle retention.
• Long-Term Outlook: 2025 should bring tighter spreads for beef meatpackers compared to 2024, with further intensification in 2026.

Important Disclosures

• Citi Research may have conflicts of interest due to its business relationships with Minerva.
• Analyst compensation is not directly linked to specific recommendations.
• The report includes a disclaimer that past performance is not indicative of future results.
• The report may not be suitable for all investors and is not a recommendation.

Regulatory and Distribution Notes

• The report is subject to FINRA and other regulatory requirements.
• Research content is disseminated to both institutional and retail clients.
• The report may be distributed through third-party aggregators.
• The Firm is not a market maker for the instruments mentioned, but may act as a liquidity provider.

Conclusion

Minerva is currently in a phase of operational growth and is expected to benefit from external market dynamics. The report suggests that the company is poised for improved financial performance in the coming quarters, supported by increased plant utilization, robust exports, and favorable global beef prices. While the long-term investment rating is Neutral, the short-term catalyst watch indicates potential for an upside in the next 90 days. Investors are advised to consider the report as one of many factors in their decision-making process and to consult with their financial advisors for personalized guidance.