QAF

[buddy]

Their overseas adventures have been failure. They tried in India & Thailand failed. Indonesia if i remember correctly they never tried because of Salim & Indosari connection.

[freedom]

QAF was trading at all time high above 80 cents since at least 2000 with substantially higher volume than normal.

since March 23, there has not been one day the volume lower than 1million traded on SGX. before that, there are hardly any days volume higher than 1 million. The volume could be as low as 0 or less than 100,000 shares traded on SGX.

given that it is tight held by Indonesian families, the recent volume has been quite abnormal.

QAF's value is actively being realized or something brewing?

[bluechipstamp]

Sam Goi has been buying, although I'm not sure if this explains all the volume. Look @ the latest Annual Report.

[freedom]

Sadly the volume only picked up after the date of shareholder statistics of annual report.

Otherwise, might reveal who is actively buying QAF. Or Someone is purposely buying after that date to hide his identity?

[freedom]

1Q bakery business profit dropped, something to do with Massimo in Malaysia? just speculation only.

[buddy]

Hi Freedom I may have missed it : where did you see in announcement bakery business profits were down 8%?

[freedom]

Hi Freedom I may have missed it : where did you see in announcement bakery business profits were down 8%?

sorry for late reply. I don't know about 8%, but

As such, there was a decline in profit contribution from the
Bakery segment.

Pg 9 of 1Q report, section 8 under "INCOME STATEMENT", paragraph 2.

my another speculation would be "profit attributable to non-controlling interests", If I am not wrong, the major non-controlling interests should be its bakery operation in Malaysia, that's why I speculated that the drop in profit could be related to Massimo saga in Malaysia.

[Choon]

I came across Valuebuddies when I was researching on QAF recently.

Initially very excited as I thought Gardenia was a strong brand name and indeed Bakery earn very high returns (ROA, ROIC, you name it).

However after looking at the recent historical financials of the Bakery segment, I concluded that Bakery is not such a strong business as it has not been able to pass on higher grain/oil/production costs. In past 5 years, while revenue is up significantly (on higher sales in Msia and Philippines), bakery profit slid significantly.

So I thought there is little certainty on Bakery profit in the next few years given this high inflation world. So if the best business Bakery is doubtful, then I thought can forget about QAF.

[Musicwhiz]

Gardenia! "So good that you can even eat it on its own - nice jingle!"

*For the full article, please visit the website.

The Straits Times
www.straitstimes.com
Published on Aug 07, 2012
QAF's second-quarter profit up 32% to $8.6m

By Dennis Chan deputy money editor

QAF, the maker of Gardenia bread, reported a 32 per cent rise in second-quarter net profit to $8.6 million yesterday.

Revenue for the three months to June 30 dipped marginally to $244.1 million from $247 million previously.

There was a small decline in revenue contribution from the group's Australian-based integrated meat producer, Rivalea (Australia), as its Australian dollar denominated sales translated to lower Singapore dollars.

If the currency effect was excluded, Rivalea would have achieved an increase in sales due to a higher overall sales volume.

Sales from the bakery business segment were relatively flat as there had been no increase in the production capacity.

The trading and logistics business segment, on the other hand, achieved higher sales.

This was mainly attributable to Ben Foods, which enjoyed increased sales in its wholesale, food service and export businesses.

The group reported higher profit mainly due to the significant improvement in the profitability of Rivalea, benefiting from higher sales of value-added and branded products while attaining lower feed and production costs.

Trading and logistics also chalked up improved profits due to higher sales and better margins.

However, profit contribution from bakery declined. While the cost of flour fell, bakery operations continued to face higher diesel and utility costs due to high international oil prices.

There was also increased competition, which has affected the margins of certain products.
-----------------------

[rogerwilco]

Interesting blog about Groupo Bimbo (the world's largest bread baker), one of QAF's competitor in China

HBR Blog: How the World Largest Bakery Puts Execution Before Strategy

How the World's Largest Bakery Puts Execution Before Strategy
by Mauro F. Guillén and Esteban García-Canal

In today's world, all companies need to be able to function in chaotic, unpredictable business environments. Emerging multinationals already know how to do that — it's what they're used to. Take Bimbo, the world's largest bread baker. The company, founded in 1945 by a Spanish immigrant to Mexico, uses execution excellence to adapt to rapidly changing circumstances and customer preferences.

Initially seeking low-cost and relatively unsophisticated ways to grow, the firm expanded its operations throughout Latin America in subsequent decades. It made its first U.S. acquisition in 1996, thanks in large part to a focus on optimal efficiency in oven utilization and delivery routes. By 2012 it had swallowed up more than a dozen U.S. firms, including the bakery divisions of Weston Foods and Sara Lee.

Bimbo's executives understand that in a low-margin business like theirs, execution is crucial. Profits depend heavily on getting the right amount of highly perishable products to stores at the right moment and at a reasonable cost. In many markets, "stores" are mainly mom-and-pop outlets scattered many miles from one another over poor roads. To make such customers profitable, Bimbo searches relentlessly for ways to eliminate waste and increase the efficiency of its operations.

The same approach served Bimbo well when it acquired the bakery division of Sara Lee, the huge U.S. food, beverage, and personal-care company. For years, sales for Sara Lee's bread business had been declining because of what we see as a lack of focus on maintaining high standards in execution. Success would have entailed continual improvements in production and distribution efficiency, but the company did not choose to pursue that approach. In 2010 Sara Lee sold the bread business to Bimbo, which applied its execution focus to the business.

Bimbo's leaders are continually on the road, looking for ways to improve the productivity of its 100 plants on three continents, its huge truck fleet, and other operational elements. For instance, it uses tricycle delivery bikes in urban areas of China where streets are too narrow for trucks, a practice it first implemented in Latin America. At the same time, all of its trucks are equipped with sophisticated computer systems to optimize delivery routes.

As Bimbo has expanded, it has adapted to consumer trends and local preferences, creating niches all over the world. Even in China, a country in which bread is little more than a culinary footnote, Bimbo has found a responsive customer base among young, urban consumers, successfully offering individually wrapped snacks such as beef rolled in bread.

If there is a vision at Bimbo, it's chief executive Daniel Servitje's insistence on keeping "a firm grip on the day-to-day realities" of operations. Many emerging multinationals maintain a similar focus on execution. Often, the only way for those companies to compete with their better-capitalized rivals in the developed world is to keep costs very low through a combination of operational excellence and cheap labor. Bimbo's choice to focus more intently on execution than on detailed planning suggests that the company's leaders understand the danger of becoming encumbered by rigid internal rules about which markets to target and how — rules that have prevented developed-world multinationals from moving more quickly into the booming markets of the developing world. Instead of getting bogged down in planning, Bimbo takes chances, experiments, gets market feedback quickly, and does what's needed to improve its value proposition to customers.

Bimbo is just one example of an emerging-market multinational that is demonstrating a surprising ability to surmount business challenges that developed-world companies have avoided or given up on. Unencumbered by complicated or calcified rules about which markets to focus on and how to grow, these firms are achieving success by executing first and analyzing later, pursuing headlong expansion, and embracing turbulent markets.