logo transparent gif
top_white_spacer
Home Latest Forum Topics MyCorner - Personal Stocks Porfolio Stock Lists Investor Insights Investor Research & Links Dynamic Stock Charting FREE Registration About Us top spacer top spacer
 User Password Auto-Login
Enter Stock
 
righttip
branding

FOOD EMPIRE's Stock Has Rocketed 70%. What's Driving It, What Will Fuel Its Next Growth Spurt?

This article is republished with permission from NextInsight .

14-May    Share!

About five months ago (Jan 2025), we put out this article:20x PE for Oriental Kopi IPO? Food Empire's 8x Looks Like a Steal in Comparison

It highlighted the relatively low valuation of Food Empire compared to IPO aspirant Oriental Kopi and peers in coffee-related businesses.

Since then, especially after Food Empire unveiled a strong set of FY24 results in Feb 2025, its stock has re-rated strongly, hitting $1.70 yesterday (and that's ex-dividend of 8 cents/share).

chart5.25Food Empire's stock is +70% since the start of the year. Cafe Pho is Food Empire's best-selling instant coffee in Vietnam.

In a new business update, Food Empire said that its revenue had a solid start to the year, growing by 16% year-on-year to USD136.6m in 1Q2025.

This figure was a little bit better than what analysts expected.

And for the first time ever, the Southeast Asia segment has overtaken Russia as the largest revenue contributor.

This is a big deal as it validates the group's strategy that began years ago to derive revenue from different markets.

In 1Q25, Southeast Asia revenue hit USD40m, a jump of 33.8% year-on-year.

Driving this impressive growth was Vietnam, which saw a 44.6% surge in revenue, helped by things like a stronger sales team, effective marketing, and engaging with customers.

 
Sudeep TWC 2016CEO Sudeep Nair with executive chairman Tan Wang Cheow.

Growth across major segments

 
Other key markets also saw positive growth in 1Q25.

The Ukraine, Kazakhstan, and CIS markets grew by 14.9% year-on-year to USD33.9m, largely driven by Kazakhstan, which now includes the contribution from Tea House LLP.

Market Segment

YoY Revenue Growth in 1Q2025

Southeast Asia

33.8% 

- Vietnam

44.6% 

South Asia

31.7% 

Ukraine, Kazakhstan & CIS

14.9% 

- Kazakhstan

29.0% 

- Ukraine

9.9% 

Russia

0.5% 



South Asia (mainly India) also performed well, up 31.7% year-on-year, with high demand for coffee from production facilities running at full capacity.

Even Ukraine posted a 10% increase in revenue.

This widespread growth highlights Food Empire's ability to manage various market conditions, partly through adjusting prices to handle rising costs.


2024 revenue2.25After a record year of sales in 2024, analysts project another record in 2025.


Looking ahead, Asia is expected to be the primary engine of growth.

Food Empire has some serious expansion plans underway in the region to boost capacity:

● In Vietnam, it's building a freeze-dried soluble coffee facility that's set to finish by 2028. This will make Food Empire a major player of instant coffee across Asia.

● In Malaysia, its snack manufacturing facility is being expanded, with completion expected in 1H2025.

This will increase capacity for potato chips, instant breakfast cereals, and assorted frozen convenience foods by about 50% by the third quarter.

Food Empire is also increasing the usage of its expanded production facility of non-dairy creamer.

● In Kazakhstan, the Group's first coffee-mix facility is expected to be completed by the end of 2025, projected to boost Food Empire's total coffee-mix capacity by 15%.


usd ruble3.25
These investments and the successful move away from heavy reliance on Russia are seen as key reasons why investors are taking a shine to Food Empire.

Historically, being largely dependent on Russia meant Food Empire's shares traded at a lower price-to-earnings (P/E) ratio compared to its peers.

"With Russia no longer the dominant contributor and its Asia expansion plans in place, we believe the successful diversification justifies a P/E re-rating with a lower discount to its peers," said Jarick Seet of Maybank Research.

Analysts have now set higher price targets for the stock. 

Analyst

Target Price

P/E (Year)

CGS International

S$1.95 

13.4× (FY26) 

UOB Kay Hian

S$1.98 

15× (FY25) 

Maybank

S$2.00 

13× (FY25) 

 

Positive future

 

Analyst

FY25 Net Profit (US$m)

Core EPS Growth (YoY)

FY25 Dividend Yield*

CGS International

53.9

8.4%

~4.6%

UOB Kay Hian

54.0

8%

4.5%

Maybank Research

65.0

22.9%

5.6%

*based on $1.70 stock price

Analysts are positive about the future, expecting growth to continue, supported by strong brand recognition and the ability to pass on price adjustments.

Potential positive drivers for the share price include strong financial results, better sales volumes, and improving profit margins.

They also see the potential for an attractive dividend yield.

Of course, risks like an escalation of the conflict in Ukraine or currency fluctuations could impact performance.

Overall, the anlayst reports suggest a positive trajectory for Food Empire, driven by strong performance in Asia and strategic capacity expansion.

 

The analyst reports are here:
CGS International, UOB Kay Hian and Maybank Research.


Contributed By: NextInsight



ShareJunction Version: 22 Oct 2017 - All Rights Reserved. Copyright ShareJunction Pte. Ltd. Disclaimer: All prices from are delayed. ShareJunction does not provide you with any financial advice. We are not into the business of providing any investment advice. See our Terms and Conditions and Privacy Policy of using this website. Data is delayed for varying periods of time depending on the exchange, but for at least 15 minutes. Copyright © SIX Financial Information Ltd. and its licensors. All Rights reserved. Further distribution and use by third parties prohibited. SIX Financial Information and its licensors make no warranty for information displayed and accept no liability for data and prices. SIX Financial Information reserves the right to adapt and/or alter this website at any time without prior notice.

Web design by FoundationFlux. Hosted with Signetique Cloud.