Fraser & Neave (F & N)

F&N to acquire Warburg’s vending businesses

Warburg is a leading player in the Singapore vending market with over 18 years of operational experience.

Highlights :
* Signs agreement to acquire 100% of the shares in Warburg’s vending businesses held through three Warburg entities for around S$29 million in cash
* Strategic fit with F&N’s food and beverage business, Warburg has been a partner of F&N since 2011
* Consolidation of F&N’s and Warburg’s vending businesses offers consumers added convenience and wider range of products

F&N, armed with its sales proceeds from selling the Myanmar brewery, has been slowly increasing its stake in Vinamilk.

Before 7th Dec 2016: 10.95%
After 11th May 2017: 16.04+2.7 = 18.74%

http://infopub.sgx.com/Apps?A=COW_CorpAn...5595b41f48
http://infopub.sgx.com/Apps?A=COW_CorpAn...97013adbfa

(12-05-2017, 10:18 AM)weijian Wrote: F&N, armed with its sales proceeds from selling the Myanmar brewery, has been slowly increasing its stake in Vinamilk.

Before 7th Dec 2016: 10.95%
After 11th May 2017: 16.04+2.7+1 = 18.74%

http://infopub.sgx.com/Apps?A=COW_CorpAn...5595b41f48
http://infopub.sgx.com/Apps?A=COW_CorpAn...97013adbfa

As a matter of curiosity, Vietnamese love to drink milk alot or they have lots of babies? What make the milk business lucrative is what i try to understand? 

(13-05-2017, 11:44 AM)MINX Wrote:

(12-05-2017, 10:18 AM)weijian Wrote: F&N, armed with its sales proceeds from selling the Myanmar brewery, has been slowly increasing its stake in Vinamilk.

Before 7th Dec 2016: 10.95%
After 11th May 2017: 16.04+2.7+1 = 18.74%

http://infopub.sgx.com/Apps?A=COW_CorpAn...5595b41f48
http://infopub.sgx.com/Apps?A=COW_CorpAn...97013adbfa

As a matter of curiosity, Vietnamese love to drink milk alot or they have lots of babies? What make the milk business lucrative is what i try to understand? 

Maybe F&N is hoping to export their milk to other countries? I know in Spore, the milk powder manufacturer increases prices twice a year. So expensive that even now our minister is looking into it.

F&N reported its 3Q17 results recently.

The interesting thing to note is that F&N has started to recognize VinaMilk's contribution under the equity accounting method (although it has <20% stake, it has 2 directors on its board now) from this quarter onwards. Based on previous revelation, VinaMilk expects to report ~596mil sgd for FY17 - equity accounting for it would be ~100-110mil sgd addition of profits for F&N's P/L statement - which is considerable and makes up >50% of their existing PATMI.

9M17 results: http://infopub.sgx.com/FileOpen/3Qtr-Jun...eID=466092
9M17 PR: http://infopub.sgx.com/FileOpen/FN-3Q201...eID=466093

Subscription of shares in, and entry into non-binding MOU with, Tsit Wing International Holdings Ltd

F&N announced that it had, on 20 April 2018, entered into a cornerstone investment agreement as part of the Global Offering to subscribe for 32 million Tsit Wing Shares, representing approximately 4.42% of the total number of Tsit Wing Shares immediately following completion of the Global Offering (assuming that the Over-Allotment Option (as defined in the Prospectus) is not exercised), up to a maximum offer price of HK$2.19 per Tsit Wing Share.

(30-04-2018, 06:07 PM)cyclone Wrote: Subscription of shares in, and entry into non-binding MOU with, Tsit Wing International Holdings Ltd

F&N announced that it had, on 20 April 2018, entered into a cornerstone investment agreement as part of the Global Offering to subscribe for 32 million Tsit Wing Shares, representing approximately 4.42% of the total number of Tsit Wing Shares immediately following completion of the Global Offering (assuming that the Over-Allotment Option (as defined in the Prospectus) is not exercised), up to a maximum offer price of HK$2.19 per Tsit Wing Share.

Tsit Wing has today announced the offer price and allotment results of the Global Offering on the Hong Kong Stock Exchange. The offer price has been determined at HK$1.98 per Tsit Wing Share (exclusive of brokerage, levies and the stock exchange trading fee). 

Based on the offer price of HK$1.98 per Tsit Wing Share and F&N's commitment to purchase a fixed number of 32,000,000 Tsit Wing Shares under the Cornerstone Investment Agreement, the aggregate consideration for the 32,000,000 Tsit Wing Shares amounts to HK$63,360,000 (approximately S$10,761,062) (exclusive of brokerage, levies and the stock exchange trading fee).

F&N a Potential BuyOut Target - A Value Stock Containing 2 Growth Stocks
April 08, 2019
Fraser and Neave Ltd currently trades at around 1.8x level and has a market cap of about 2.6 bil, I believe its very undervalued and its fair value could be worth 3.00 with a potential market cap of about 5 bil!

F&N holds 2 very valuable assets

20% stake in Vietnam Dairy Products Corp - which has a market cap of 10 bil USD (2 bil USD)

50% stake in Fraser & Neave Holdings Bhd - which has a market cap of 13.5 bil MYR (6.75 bil MYR)


Vietnam Diary Product (Vinamilk) is a wonderful growth stock with a track record of growing earnings at over 10%, its trading at about 20 times earnings with an amazing 40% ROE!




F&N Bursa also has an impressive track record but trades at an expensive valuation of 30 times earnings.

So how will its full value be realized? I think there is a possibility for Thaibev to purchase F&N outright since its so cheap and they would love its 20% stake in VinaMilk, Thaibev already owns 30% and could easily swap its FCL shares for FNN shares with the parent company TCC, paying cash for the remaining shares.

F&N has been paying 4.5 cents dividends for the past 3 years, this translate to a low and disappointing yield of only 2.5% which may be the reason of its current low prices. I believe their earnings for 2019 will be much higher due to the new equity accounting methods for their stake in Vinamilk, thus at a 50% dividend payout I expect dividends to be increased to around 8 cents. As earnings continues to grow, dividend payout will grow thus paying us a little more while waiting for the value to be unlocked.

(08-04-2019, 02:08 PM)masterleong Wrote: F&N a Potential BuyOut Target - A Value Stock Containing 2 Growth Stocks
April 08, 2019
Fraser and Neave Ltd currently trades at around 1.8x level and has a market cap of about 2.6 bil, I believe its very undervalued and its fair value could be worth 3.00 with a potential market cap of about 5 bil!

F&N holds 2 very valuable assets

20% stake in Vietnam Dairy Products Corp  - which has a market cap of 10 bil USD (2 bil USD)

50% stake in Fraser & Neave Holdings Bhd - which has a market cap of 13.5 bil MYR (6.75 bil MYR)


Vietnam Diary Product (Vinamilk) is a wonderful growth stock with a track record of growing earnings at over 10%, its trading at about 20 times earnings with an amazing 40% ROE!




F&N Bursa also has an impressive track record but trades at an expensive valuation of 30 times earnings.

So how will its full value be realized? I think there is a possibility for Thaibev to purchase F&N outright since its so cheap and they would love its 20% stake in VinaMilk, Thaibev already owns 30% and could easily swap its FCL shares for FNN shares with the parent company TCC, paying cash for the remaining shares.

F&N has been paying 4.5 cents dividends for the past 3 years, this translate to a low and disappointing yield of only 2.5% which may be the reason of its current low prices. I believe their earnings for 2019 will be much higher due to the new equity accounting methods for their stake in Vinamilk, thus at a 50% dividend payout I expect dividends to be increased to around 8 cents. As earnings continues to grow, dividend payout will grow thus paying us a little more while waiting for the value to be unlocked.

Any thoughts if the other parts of F&N (less F&N Bhd and Vinamilk) are worth positive or negative?

The publishing and printing business remains loss making, while the SG beverage business is not so positive. To be conservative i value all their other businesses as zero, only taking the 20% stake in vinamilk and 50% stake in F&N bursa to derive a nav per share of about $3.00