This also comes after core net profit for 2025 rose 38% year on year, beating expectations

[SINGAPORE] Various analysts have raised their target prices on   Food Empire   : F03 +1.25%, after the group released its &ldquo stronger-than-expected&rdquo results for FY2025. 

 

UOB Kay Hian (UOBKH) analysts John Cheong, Heidi Mo and Tang Kai Jie noted that its total revenue rose by 21 per cent year on year to US$577 million, as the company sees momentum and &ldquo double-digit growth&rdquo across most key markets.

 

As such, they increased the target price by 40 per cent to S$4.21 from S$3 previously. The counter was up 0.9 per cent or S$0.03 at S$3.24 as at the midday break.

 

The group reported a 2025 profit after tax and minority interests (Patmi) of US$36 million, which factors in a one-off, non-cash fair value loss of US$32.6 million on redeemable exchangeable notes.

 

&ldquo Excluding this item, core Patmi had surged 38 per cent year on year to US$68.6 million, beating our full-year forecast by 15 per cent,&rdquo said the UOBKH analysts in their Thursday (Feb 26) report.

 

Separately, the strong revenue figure was recognised by Maybank Group Research analyst Jarick Seet as well, who has kept a &ldquo buy&rdquo rating on Food Empire and a target price of S$3.95, up from S$2.92.

 

He noted that in particular, revenue from Russia and Central Asia surged 34.8 per cent and 25.6 per cent year on year, respectively, driven by higher sales volume and price gains, supported by improved in-store execution and broader product range representation.

 

&ldquo This came alongside a 10 per cent appreciation of the Russian Ruble against the US dollar,&rdquo the analyst wrote on Friday.

 

The growth from Central Asia is also partially aided by the full-year consolidation of Tea House, which became a subsidiary of the group in May 2024, said Seet.

 

At the same time, South Asia and South-east Asia revenue grew 16 per cent and 14 per cent year on year, respectively, driven by stronger market engagement, with South-east Asia contributing 26 per cent of total revenue.

 

Notably, Vietnam was a significant contributor to the group&rsquo s South-east Asia sales, on &ldquo new products and marketing strategies&rdquo , according to Alfie Yeo, RHB Group Research analyst. 

 

&ldquo Food Empire&rsquo s Vietnam facility currently has a production area of around 1,313 square metres,&rdquo flagged Maybank&rsquo s Seet. &ldquo Management plans to increase production capacity by 15 per cent in 2026 through automation, and by another 30 per cent in 2027.&rdquo

 

Management also declared a final dividend of S$0.05 per share, and special dividend of S$0.04 per share, which the analysts were upbeat about.

 

Yeo cited this move as a &ldquo positive surprise&rdquo , as it brings the full-year dividend per share to S$0.12, with a payout ratio of 86 per cent. He has raised his target price on the counter to S$3.73, from S$2.95.

 

On a whole, the analysts expect core net profit and revenue margins to stay strong in FY2026. 

 

&ldquo Capacity expansion should continue to drive top-line growth, while improving sales mix and operational efficiencies are expected to support margins going forward,&rdquo noted the UOBKH analysts.

 

Some risks to such forecasts include a disruption in operations due to the Russia-Ukraine conflict, and the negative effect of a change in the value of the ruble and other countries&rsquo currencies, Yeo from RHB Group Research said.