Food Empire

[Squirrel]

UOB Kay Hian initiated a buy call on Food Empire, covered on business times.

https://www.businesstimes.com.sg/compani...089-target

[donmihaihai]

Interestingly, Food Empire also included(unlucky) in the list of companies to that are mandatory (lucky) to report quarter results because of qualified opinion from their auditor.

The list is also in the news.

[Squirrel]

Latest Financial Statements released. Stellar results!

Enjoy.

https://links.sgx.com/FileOpen/FY2019%20...eID=597521
https://links.sgx.com/FileOpen/FY2019%20...eID=597520

[Squirrel]

Latest Financial Statements released. Stellar results!

Enjoy.

https://links.sgx.com/FileOpen/FY2019%20...eID=597521
https://links.sgx.com/FileOpen/FY2019%20...eID=597520

Some comments after looking at the FS.

Definitely showing the fruits of rationalization. Cashflow remains strong and with this kind of cashflow, the liabilities put on for the factory in India will be paid off in no time.

Seems like they are pushing further in making the "Ingredients" category a more substantial part of the business.

"Following the success of its first Non-Diary Creamer (“NDC”) plant, which is currently fully utilized, the Group has unveiled plans to commence the construction of a second NDC project on its existing plot of land located in the Iskandar region of Malaysia. The project will leverage on existing infrastructures and resources and is expected to take place over the next 24 months. When completed it will increase the existing capacity and offer a wider range of NDC products."

And of course the imminent start to production for the coffee plant.

"The Group’s Instant Freeze Dry Coffee plant in India is expected to be completed and will commence commercial production during the year."

And finally, rewarding the shareholders with a bump in dividends to SGD 2 cents.

[Squirrel]

Just deem it proper to flag that Ruble has devalued to 74.5 thereabouts from 62 since the oil shock. Since this is one of the risks being discussed earlier, holders of the position should be aware and consider the possibilities of further Ruble depreciation.

[¯|_(ツ)_/¯]

1H Result as at 30 Jun 2020
Rev USD132m (vs 138m)
GP  USD 53m (vs 54m)
NP  USD 13m (vs 13m)

The Group’s reporting currency is USD but Group’s subsidiaries in some of its largest markets such as Russia, Ukraine and Kazakhstan report in their local currencies and are exposed to foreign exchange risk. Russian Ruble may be affected by oil prices or other political conflicts. Similarly, the Ukrainian Hryvnia and Kazakhstan Tenge are susceptible to regional politics, oil prices and fluctuations of the Russian Ruble. Nonetheless, the Group has proven over the past years that in spite of devaluations of local currencies, it possesses strong brands and experienced management teams to overcome such potential short term risks.

The second Instant Coffee plant project, which is initially scheduled to commence production in middle of FY2020, will be delayed until international travel restrictions are lifted for overseas OEM suppliers to test and commission the plant. India is currently facing severe disruptions in various states and cities due to Covid-19 pandemic and strict overseas travel restrictions are in place. The Group will work with all parties involved closely to ensure that the plant can be completed and be operationally ready as quickly as possible. 

Stay home and stay healthy, valuebuddies.

[Squirrel]

Another brokerage upgrade. its interesting how prices move with such recommendations when forums like this are generally ignored. Does that implicitly suggest brokers have better analysis than the mass market?

Congrats to shareholders!

https://www.nextinsight.net/story-archiv...arget-1-30

[weijian]

Commodity prices are creating havoc to margins for companies that are creating brands out of commodities.

Food Empire achieves higher y-o-y revenue for 9M2021 in spite of Covid-19 lockdowns and supply chain disruptions

• Revenue increased by 11.2% to US$226.1 million as each of the Group’s core markets registered growth in 9M2021 despite challenging operating conditions.

• Margin pressure due to high commodity costs and record high ocean freight rates, coupled with shortage of shipping container slots resulting in supply chain delays.

• Group remains cautiously optimistic for the year and will work towards balancing revenue growth and profitability in view of cost pressures and supply chain issues.

https://links.sgx.com/FileOpen/9M%2021%2...eID=690013

[BlueKelah]

Hi guys, looks like no one is looking at this instant coffee making counter. Is anyone here vested? It seems as ruble has recovered well post gold pegging, this company is now raking in massive profits. It is also showing very good growth in India segment.

Recent big sale of a property holding to lian beng (45+m vs their ~300m market cap) also means they should be in a strong net cash position and likely able to raise dividends going forward despite upcoming global recession ( people still have to drink coffee, maybe more people especially if coffee shops become too expensive.)

I am not too familiar and will be doing a deeper dive into the company in time but would like to hear what you guys have to say about it currently after their recent good turnaround results.

One thing I am wondering is how come their revenue grows a bit in Ukraine despite the country being in war. Maybe army or locals are constantly stockpiling staples like instant coffee?

At current levels, with the stock price sold down after recent russian war fiasco, looks like a very good buy for next 5-10years as company grows. Especially with >70% top shareholder holdings i think likely to have some sort of privatisation potential?

[xierwang]

Hi guys, looks like no one is looking at this instant coffee making counter. Is anyone here vested? It seems as ruble has recovered well post gold pegging, this company is now raking in massive profits. It is also showing very good growth in India segment.

Recent big sale of a property holding to lian beng (45+m vs their ~300m market cap) also means they should be in a strong net cash position and likely able to raise dividends going forward despite upcoming global recession ( people still have to drink coffee, maybe more people especially if coffee shops become too expensive.)

I am not too familiar and will be doing a deeper dive into the company in time but would like to hear what you guys have to say about it currently after their recent good turnaround results.

One thing I am wondering is how come their revenue grows a bit in Ukraine despite the country being in war. Maybe army or locals are constantly stockpiling staples like instant coffee?

At current levels, with the stock price sold down after recent russian war fiasco, looks like a very good buy for next 5-10years as company grows. Especially with >70% top shareholder holdings i think likely to have some sort of privatisation potential?

I am longer term investor for this co after Super was bought out. valuation is not rich and less depending on Russia and Ukraine markets now. As for the privatisation potential, yes, there is such posibility but likely not so soon.