Philippine Seven Corporation (SEVN) is the owner of the license to establish and operate 7-Eleven convenience stores in the country. It is a subsidiary of the President Chain Store Corporation of Taiwan which owns the license to establish and operate 7-Eleven convenience stores in Taiwan.
As of June 30, 2020 (1H20), SEVN reported to have 2,930 7-Eleven convenience stores spread all through-out the country, the largest convenience store network in the country.
At the end of 1H20, there are 2,222 7-Eleven stores in Luzon, 1,019 of which are in Metro Manila, 425 in Visayas and 283 in Mindanao. Franchisees operate 55% of its store base and 45% are company-owned.
SEVN is the only operator with the critical mass to build out proper supply chains in areas logistically unreachable from the greater Metro Manila area. It has fourteen (14) operating distribution centers (DC) nationwide. There are six DCs in Luzon, five in Visayas and three in Mindanao.
SEVN’s digital efforts have led to a more data-driven approach, incorporating elasticity to assortment and pricing. It had exerted efforts in formulating and testing such initiatives, some of which have already entered the scaling phase. It expects those initiatives to enhance its overall value proposition vis a vis the recent but fast growing minimart format, especially as a response to the pandemic.
SEVN seeks to meet the needs of its customers and maintain a leadership position in the convenience store space by taking advantage of economies of scale, technology, people and a widely recognized brand.
The above made the SEVN a well valued company. The market per investagrams.com data values SEVN at 152 P/E multiple.
But that 152 P/E multiple is less than half of that of MerryMart’s (MM) 314 P/E multiple (per investagrams.com data). Mind you, MerryMart has only 7 stores as of June 30, 2020. It added 2 stores on August 8, 2020 (1 in Isulan, Sultan Kudarat and 1 Bulua Cagayan de Oro) so it has 9 stores in total recently.
Disclaimer and Disclosure: This is an independent analysis for discussion purposes with the aim of giving stock traders and investors an independent view point. Accuretti Systems Inc. in the course of day to day trading may have own, or is considering buying or disposing, the shares of the companies mentioned in this commentary.
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