Emperador replacing ComfortDelgro on the STI! What you need to know about the world's largest brandy maker



By Beansprout • 02 Sep 2022 • 0 min read

Emperador, the largest brandy maker in the world, will replace ComfortDelgro on the Straits Times Index (STI). Here's what you need to know about the Philippines-based company.

Emperador brandy SGX

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What happened?

Many Singapore investors were surprised to read that there will be a new addition to the Straits Times Index (STI) - Emperador

As part of the September 2022 review, Emperador will replace taxi operator ComfortDelgro in Singapore's benchmark index from 19 September. 

For those of you who might not be familiar with Emperador, it is a Philippines-based manufacturer and distributor of brandy, whisky and other spirits. 

Emperador started its secondary listing on the Singapore Exchange on 14 July. This made Emperador the first stock listed on the Philippine stock exchange to have a secondary listing on the SGX. 

Since its listing in July, the stock has done well and gone up by more than 10%. The stock got a further boost after news of the inclusion into the STI was announced. 

Emperador share price

As a quick recap, the STI tracks the performance of the 30 largest and most liquid companies listed on the Singapore Exchange (SGX). You can read more about the STI in Beansprout Academy. 

What many investors may not be aware of, is that it doesn't matter where the company's primary business operations are. 

So while you might be more familiar with ComfortDelgro (as a frequent user of taxis), a company based and operating overseas can still be included in the STI if it is listed on the SGX. 

This is why companies such as Hongkong Land and Jardine Matheson are also in the STI.

Apart from being listed on the SGX, the other key metrics that are looked at are a stock's market capitalisation, free float and trading liquidity.

To be included in the index, Emperador would have met these requirements since its listing in Singapore in July. 

For example, it was shared by SGX that since its listing on 14 July, Emperador has ranked amongst the top one-eighth of most traded Singapore stocks. 

Emperador saw record daily turnover of S$7 million on 29 July, more than threefold the session’s turnover of the primary Philippines listing.

Source: SGX

4 things to know about Emperador 

When we think of brandy, we usually associate it with cognac. Just like how champagne is often seen as the finest of all sparkling wines. 

But most of us are probably not aware that the largest brandy maker in the world actually comes from the Philippines.

Emperador, world's largest brandy maker, poised for SGX secondary listing
Source: Emperador

#1 – World’s largest brandy maker 

One thing you need to know about Emperador – it is the world’s largest brandy maker by volume. 

(For those who are not familiar, brandy is a liquor produced by distilling wine). 

Apart from its dominant market position in the Philippines, Emperador also owns Bodegas Fundador, Spain’s biggest and oldest brandy maker. 

Some of the brands in its family include Fundador, Terry Centenario, and Harveys Bristol Cream.

bodegas fundador
Source: Emperador

Through its acquisition of Whyte & Mackay, Emperador also has a portfolio of Scotch whisky brands such as the Dalmore, Jura, Fettercairn, and Tamnavulin.

A group of bottles with red liquid

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Source: Emperador

#2 –Emperedor’s largest shareholder is one of the largest conglomerates in Philippines

Emperador is owned by the Alliance Global Group Inc (AGI), which is one of the largest conglomerates in the Philippines and has more than 84% stake in the company as of September 2021. 

Emperador’s Chairman and CEO is Mr Andrew Tan, who is the #8 richest in the Philippines according to Forbes (2021).

The son of a factory worker, Andrew built his wealth developing apartments around Manila. 

He launched Emperador Brandy in 1990, the first brandy product in the country. This was a time when gin and rum were the most popular spirits in the Philippines. 

By 2006, Emperador was the top selling brand in the world, which is a remarkable achievement given its short history!

Fun fact: Andrew’s father bought a bottle of brandy at his graduation in 1974, which was the first time Andrew tried brandy. 

AGI chair Andrew Tan leads the 2016 Tourism Personality Awardees | Alliance  Global Group, Inc.
Source: Emperador

#3 – Revenue growth impacted by lockdowns in 1Q22

Emperador’s revenue has been growing together with the increasing volume of spirits sold.  

In 2021, revenue grew by 6% to reach PHP 55.9 billion.

Revenue growth slowed down to just 2% in 1Q22, as brandy revenues fell by 6% compared to the previous year. 

With close to 85% of Emperador’s brandy revenue coming from the Philippines, the Covid-related lockdowns in January affected sales volumes.

On a more positive note, Emperador’s whisky saw strong revenue growth of 20% in 1Q22. 


Chart, bar chart

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Revenue in billion pesos. Source: Emperador

#4 – Margin is under pressure

More worryingly, brandy gross margin declined to 25% in 1Q22 from 28% in 1Q21.

This was because of a significant increase in input costs, as we have seen a sharp spike in the price of various commodities, including wheat and sugarcane. 

Using the price of sugar as an example, it has risen by more than 10% over the past year. 

While Emperador has raised prices at the start of the year, they were not enough to offset the higher input costs. 

Sugar Price
Source: Trading Economics

Why should we care?

Emperador offers exposure to growing consumption in the region

Many investors have always been interested in consumer stocks for their long term growth angles. 

Unfortunately, following the delisting of stocks such as Osim, Super and Breadtalk, there are less consumer stocks to look at these days. 

If you are looking at spirits – there’s Thai Beverage. If you are looking at Philippines consumption growth – there’s Del Monte Pacific. 

So the listing of Emperador in Singapore does provide more options for investors to choose from. 

It might be worth noting that the trading of Emperador on the SGX is subject to a stock transaction tax (STT) equivalent to 0.6% of the gross selling price.

This is a tax payable if you are selling shares of Emperador, and is required to be paid to the Phillipine tax authorities through your stockbroker.

Do not neglect other secondary listings in Singapore

What the inclusion of Emperador into the STI also tells us, is that we should not neglect the secondary listings on the SGX. 

After all, SGX's CEO Mr Loh Boon Chye recently said that he expects more US-listed Chinese companies to also list in Singapore. 

Apart from Emperador, the other stock which has gained interest as a secondary listing in Singapore is Chinese EV maker NIO. 

Like Emperador, NIO has also been among the top one-eighth of most traded Singapore stocks since its debut in May. 

As of 31 July, Nio and Emperador have attracted more than S$300 million in combined trading turnover since their respective secondary listings on 20 May and 14 July.  

If you are interested in the Chinese EV sector but would prefer a diversified portfolio of stocks, do consider looking at a China EV ETF also listed on the SGX. 

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