Cerebos Pacific

Would like to start a discussion on this thinly traded company, which incidentally is cash rich, cash generative and has a rather healthy B/S. It is quite generous with its dividends as well.

My opinion is that it is a decent investment proposition with a forward looking management. The comapny has also being pretty prompt to respond to email queries so far. At $5.00/share, its absolute price is certainly not cheap. Compared to its intrinsic value, that may not be the same case though. Ultimately it is up to investors to ascertain.

(29-06-2011, 12:35 PM)valuehunter Wrote: Would like to start a discussion on this thinly traded company, which incidentally is cash rich, cash generative and has a rather healthy B/S. It is quite generous with its dividends as well.

My opinion is that it is a decent investment proposition with a forward looking management. The comapny has also being pretty prompt to respond to email queries so far. At $5.00/share, its absolute price is certainly not cheap. Compared to its intrinsic value, that may not be the same case though. Ultimately it is up to investors to ascertain.

Are they the ones doing Brands Essence of Chicken?

(29-06-2011, 01:39 PM)Musicwhiz Wrote:

(29-06-2011, 12:35 PM)valuehunter Wrote: Would like to start a discussion on this thinly traded company, which incidentally is cash rich, cash generative and has a rather healthy B/S. It is quite generous with its dividends as well.

My opinion is that it is a decent investment proposition with a forward looking management. The comapny has also being pretty prompt to respond to email queries so far. At $5.00/share, its absolute price is certainly not cheap. Compared to its intrinsic value, that may not be the same case though. Ultimately it is up to investors to ascertain.

Are they the ones doing Brands Essence of Chicken?

Yeah... their other businesses include retail of sauces, gravies and coffee.. More about the product range and vision of the CEO can be found on the company's website.

I think New Moon and Eu Yan Sang also enter the chicken essence market. Some time ago, New Moon puts lots of posters of PSLE top scorers at the bus stop to promote the essence. Not sure if they've win any market share...

finally someone started a discussion about Cerebos.

I think Brands Essence is pretty much part of culture in Singapore. When a friend is recovering from an illness you give them Brands to strengthen their immune system, when your children undergo exams you give them Brands to improve their memory and concentration. It is this whole process of caring that creates a culture/moat.

There are other competitors out there. But if you were purchasing it as a gift, I would personally go with Brands even if it costs more. Same goes with the relationship between Hampers and Birds Nest.

Compare its ROE with Eu Yan Sang, and you can see who still commands market share.

I have glanced upon Cerebos before. Strong balance sheet and free cash flow.

Yes Cerebos Pacific is most well-known in Singapore for Brand's Essence of Chicken. But looking at people like Eu Yan Sang & New Moon, or guessing how many of our grandmothers or PSLE kids are drinking it is missing the point.

For the Brands' Essence, the largest chunk of their profits & sales is from Thailand (where they spent $75m on a factory and started it in 2009) & Taiwan. Cerebos' other segment is from coffee & sauces (although not as nice as health products) in Australia & New Zealand.

Strong balance sheet, free cash flow, and nice growth of sales, profits, cashflows and dividends.

Suntory is a nice corporate parent to have: it's probably one of the reasons why management has been there forever, except for the instant coffee & sauces biz that they bought. One fallback though is that their large holding means that liquidity, and therefore institutional interest are limited - so we don't have super fantastic price movements.

the dividends payout is normally more than fcf

Eiji Koike has stated his aim of getting the company to achieve S$2 billion in sales while keeping the same level of profitability. Question is can this be achieved and when? With time, hard work, a credible management and some good fortune, my opinion is that this outcome is both possible and probable.

(30-06-2011, 09:02 AM)valuehunter Wrote: Eiji Koike has stated his aim of getting the company to achieve S$2 billion in sales while keeping the same level of profitability. Question is can this be achieved and when? With time, hard work, a credible management and some good fortune, my opinion is that this outcome is both possible and probable.

and the best part is that he is aiming for slow sustainable growth rather than taking the risky / aggressive route