Fraser & Neave (F & N)

[Curiousparty]

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

i suppose the RNAV of F&N is much higher now. Would anyone have an guesstimatete here ? many tks.

[Curiousparty]

Possibility of F&N to reduce its Dvd ? and then share price adjusts downwards... Or rights issue??? (like Fraser Property) ...

[Shiyi]

Its Malaysian subsidiary has just reported a good set of results:

Fraser & Neave Holdings Berhad’s 2QFY24 core net earnings posted at RM162.0mn (+53.0% YoY). The higher-than-expected results were mainly attributed to the elevated festive demand.
1HFY24 core net profit surged 51.3% YoY to RM332.2mn in tandem with revenue growth of 10.7% YoY to RM2.7bn. The results were driven by robust sales and improved margins in both F&B Malaysia and Thailand.

The group has declared an interim single-tier dividend of 30.0sen/share for the quarter under review (vs. 27sen/share in 2QFY23).

[Curiousparty]

Its Malaysian subsidiary has just reported a good set of results:

Fraser & Neave Holdings Berhad’s 2QFY24 core net earnings posted at RM162.0mn (+53.0% YoY). The higher-than-expected results were mainly attributed to the elevated festive demand.
1HFY24 core net profit surged 51.3% YoY to RM332.2mn in tandem with revenue growth of 10.7% YoY to RM2.7bn. The results were driven by robust sales and improved margins in both F&B Malaysia and Thailand.

The group has declared an interim single-tier dividend of 30.0sen/share for the quarter under review (vs. 27sen/share in 2QFY23).

many tks for the info... But whether Spore F&N HQ will increase their dvd is another thing altogether.... Share price has been slowly dropping for years now..., from more than $2 to now only $1....

[Curiousparty]

An overdue restructuring? 

(not vested)

'High probability' of ThaiBev buying out F&N: Religare

SINGAPORE (May 24): Soft-drinks maker Fraser & Neave will likely be fully integrated under Thai Beverage in the coming quarters as the parent of both companies, TCC, seeks to restructure its holdings, says Religare analyst Nirgunan Tirchuchelvam.

“There is a high probability of of TCC injecting F&N’s F&B business into ThaiBev,” Tiruchelvam writes in a May 23 note.
...
http://www.theedgemarkets.com/sg/article...n-religare

any likelihood of this happening now??
Both Thaibev and F&N share prices have been languishing for years....

[Curiousparty]

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 possibility of F&N being a potential privatization target?

[Curiousparty]

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

I think the P&P business has turned the corners in the latest result Q1 2024 results..

[Curiousparty]

F&N is too Cheap.   
based on the sum of All parts, the breakup value shall be  > $3.
Dividend yield  4%.

1.  Vinamilk Stake  = 2.1 Bil    or entire F & N Singapore market capital
2. F&N Malaysia Stake  = 2.14  Bil
2.  Starback Thailand Stake
4.  Mynamar Chang Beer Stake
5. Printing

Now F&N is even cheaper. MC is only $1.5b....

[weijian]

any possibility of F&N being a potential privatization target?

After the end of the last takeover war that was won by our Thai GodFather, I am actually surprised that folks are still interested in F&N

First and foremost, no sane independent buyer will attempt to bid for F&N, so if there is a privatization, it has to come from our Thai GodFather himself. What is the track record of our GodFather?

Another potential value accretive action could be doing some business restructuring and buy/sell of existing assets. IIRC, Chaoren had already completed these actions after he won the bidding war. If given a choice, are Godfathers asset gatherers or asset disposers? If we think any behavior may change, we just need to look at the P&P business. It has been talked about for the longest time whether trying to revive it or dispose it. And after the longest time, we are still talking.

P.S. In recent times, Frasers Property has been doing more disposals than but it seemed to be driven by "bo bian". When it was cheap to borrow, they really borrowed to buy like no tomorrow!

[ghchua]

Hi weijian,

Again, I beg to differ with your views here.

When a company share price had fallen to a very depressed level I would personally be very interested as it does not take much to lift it back up. It doesn't have to be any corporate actions or business restructuring, privatization (or speculation of doing so), buy/sell of existing assets etc as you have mentioned above. Just a nice profit increase from last year will do, as F&N had shown with their latest interim result announcement.

I guess for F&N, patience is required to see them delivering from their projects/investments. They have increased their gearing for the past few years, without a corresponding increase in profits. I guess investors are disappointed with their slow progress in those projects, as their efforts had not shown up in their bottom line for the past years. Hopefully, those investments will bear fruits going forward, but the headwinds are still strong in terms of higher costs, volatile commodity prices and of course regional currencies weakness against their reporting currency, Sing$.

However, just by driving cost reduction measures and focus on sales mix and revenue generation, and efforts to drive efficiency in the company as a whole, I think it might be enough for the share price to perform. It might not reach the heights of yesterdays, but certainly there is good potential upside from current levels, plus the consistent dividend payouts that they have delivered to shareholders year after year. That to me is more than enough.