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It is promising to invest in Food empire? Dont know what price to enter
Time to buy after weak holders are flushed
out after placement
out after placement
Joelton ( Date: 25-Sep-2025 12:36) Posted:
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Food Empire builds war chest for growth
RHB Bank Singapore is reiterating its &ldquo buy&rdquo recommendation on Food Empire with a higher target price of $2.95 from $2.72 previously.
In a Sept 25 report, analyst Alfie Yeo says: &ldquo We continue to like Food Empire for its longer-term growth prospects, driven by capacity expansion. We believe its latest round of fund raising will enable it to have more cash resources to drive growth via capacity expansion, brand investment initiatives, and possible acquisitions.&rdquo
The group has recently announced a placement of $42 million via 17 million treasury shares, priced at $2.52 per share, representing a discount of 5.38% to Sept 23&rsquo s volume-weighted average price (VWAP).
The way Yeo sees it, the placement will help to broaden institutional investor base and the additional funding will enable Food Empire to pursue growth opportunities, optimise its balance sheet and reinforce long-term investor confidence. It also helps to monetise its treasury shares, which were bought back from the open market at a net weighted average cost of 90.1 cents.
Food Empire&rsquo s share base will increase to 547 million shares as a result. &ldquo Based on our computation, our FY2025-FY2026 EPS will be diluted by approximately 2% and 3.4% each,&rdquo says Yeo.
&ldquo We view this fund-raising exercise as an opportunity to place out shares at a favourable price. Proceeds will be used for working capital, capex and operational needs,&rdquo says Yeo, while adding that he expects excess cash to be deployed for more capacity expansion, brand investment initiatives, and possible M& A to drive further growth.
Growth in the medium term will be driven by more production facilities which will boost sales volume. Malaysia&rsquo s snack production capacity expansion was completed in 1H2025. Capacity will increase by 50% and revenue contribution is expected by 3QFY2025.
In Kazakhstan, the group&rsquo s first new coffee-mix factory is scheduled to open by FY2025. It will increase its production capacity for coffee mixes by 15%. In Vietnam, a new freeze soluble coffee manufacturing facility should begin operations by FY2028.
Finally, in India, it is expanding its spray-dried soluble coffee manufacturing capacity by 60%. and is scheduled to operate by FY2027. With these growth drivers intact, the group is well positioned for medium to longer term growth.
&ldquo Growth momentum remains strong and revenue continues to be driven by strong demand and sell though in existing markets,&rdquo says Yeo.
Food Empire raises S$42.8 million from placement of 17 million treasury shares
The placement is expected to broaden the company&rsquo s investor base and position it for future growth opportunities
[SINGAPORE] Food Empire raised around S$42.8 million in gross proceeds through the placement of 17 million treasury shares at S$2.52 apiece, the company announced on Wednesday (Sep 24).
This brings its issued share capital, excluding treasury shares, from 529.8 million to 546.8 million shares.
In addition to enhancing the trading liquidity of Food Empire shares, the placement is expected to broaden its institutional investor base, position the group to pursue growth opportunities, optimise its balance sheet and reinforce long-term investor confidence.
Through the placement, the company has raised net cash proceeds of around S$41.7 million and monetised treasury shares that it acquired through substantial share buybacks at a net weighted average cost of S$0.90 apiece.
Food Empire&rsquo s group chief executive and executive director Sudeep Nair said the response the placement received from institutional and strategic investors was &ldquo positive&rdquo and &ldquo sets a new benchmark going forward&rdquo .
The placement price represents a premium of 3.27 per cent to the 30-day volume weighted average price (VWAP) of shares of Food Empire.
Placement shares were priced at a discount of around 5.38 per cent to the VWAP of S$2.6634, based on trades done on the Singapore Exchange on Tuesday, the last trading day before the placement was announced.
Nair noted that a &ldquo fair and resilient&rdquo share price helps enhance the group&rsquo s flexibility in considering shares as a potential tool in future corporate or strategic initiatives.
Food Empire said that it plans to use the net proceeds for working capital purposes.
On Tuesday, when it announced the placement, the company said the shares would not be offered for sale to any existing company directors or substantial shareholders.
Food Empire may be part of SGX&rsquo s new index CGSI ups target price to $3.09
Food Empire Holdings could be a part of the new index the Singapore Exchange (SGX) is launching, says CGS International analyst William Tng.
&ldquo Our screening has identified 55 stocks that could be potential candidates for this index. We note that Food Empire also meets our screening criteria. This new index could be a benchmark for either active fund management or a passive ETF (exchange-traded fund),&rdquo Tng writes in his report dated Sept 18. The list includes ComfortDelGro, iFast Corp, Yangzijiang Financial and UMS Integration.
In addition, Food Empire could focus on consolidating its brand and market share gains in FY2027. Tng notes that the group&rsquo s Vietnam revenue grew by 36% y-o-y in FY2024, with management targeting for a growth of at least 32% y-o-y for FY2025.
Even though efforts to build its brand presence and expand market share has temporarily depressed its net margins for Vietnam, reported under its Southeast Asia segment, revenue for Food Empire&rsquo s Vietnam market may grow at a more &ldquo manageable&rdquo 15% over FY2026 and FY2027. At the same time, the group&rsquo s net margins for this particular market may normalise as its brand building efforts moderate.
Given this, Tng has increased his overall gross margin assumption by 0.75 percentage points for FY2027, leading to a 5.1% increase in his earnings per share (EPS) estimates for the same financial year.
The analyst has maintained his &ldquo add&rdquo call with a higher target price of $3.09, from $2.94, the second increase in two months. Tng had increased his target price to $2.94 from $2.73 in an Aug 13 report after Food Empire&rsquo s 1HFY2025 results.
The new target price, resulting from the higher FY2027 EPS estimate, is based on an unchanged 3 standard deviations (s.d.) and an FY2027 P/E of 17 times.
To Tng, Food Empire should consider a bonus issue to improve its trading liquidity. &ldquo Year-to-date, we note that three SGX-listed small caps have announced bonus issues, including Oiltek International Ltd whose three-month ADTV (average daily trading volume) quadrupled from $0.28 million pre-bonus issue, to $1.15 million post the bonus issue,&rdquo the analyst notes.
Food Empire jumps 2.7% after Maybank raises target price
The bank maintains a &lsquo buy&rsquo call after revisiting its Vietnam operation
[SINGAPORE] Shares of Food Empire Holdings (FEH) surged as much as 5.4 per cent on Thursday (Sep 18), two days after Maybank raised its target price.
The stock climbed S$0.14 to an intraday high of S$2.73 as at 11.10 am, later paring some gains to end the day 2.7 per cent higher at S$2.66. Nearly 1.5 million shares had changed hands.
On Tuesday, Maybank analyst Jarick Seet raised the target price of company&rsquo s shares to S$2.92, from S$2.62, and maintained a &ldquo buy&rdquo call after revisiting its Vietnam operation.
Seet said that the positivity stemmed from FEH being on track to deliver an estimated US$100 million of revenue in 2025 &ndash becoming the third-largest instant coffee player in Vietnam &ndash and its plans for product innovations to grow revenue in new segments.
He said: &ldquo With its strong pipeline of projects ahead, we believe FEH will continue to grow steadily in (the) coming years.&rdquo
&ldquo A bonus share issue may also be a possibility to improve liquidity and reward shareholders,&rdquo he added.
UOB Kay Hian last month also raised its target price for FEH to S$2.73, from S$2.40, and maintained its &ldquo buy&rdquo call as its first-half results beat expectations. The company on Aug 13 posted top-line growth for the first half of 2025.
Sudeep Nair, FEH group chief executive, said that the company is &ldquo on track to deliver... another record-breaking performance in FY2025&rdquo after the results.
Last year, FEH invested US$80 million in a new freeze-dried soluble coffee manufacturing facility in Vietnam.
Maybank raises target price for Food Empire to $2.92 CGS maintains already bullish call of $2.94
Jarick Seet of Maybank Securities has raised his target price for Food Empire Holdings following another site visit to the company' s operations in Vietnam.
He believes that with the expected growth from Vietnam, India, Kazakhstan and other Asean markets, Food Empire will see its Russia business, which generates 30% of the revenue, an increasingly smaller proportion of revenue in the coming years.
" We re-visited Food Empire&rsquo s Vietnam operation and facilities and came away more positive," writes Seet in his Sept 16 note, as he kept his " buy" call along with a higher target price of $2.92 from $2.62.
" We believe that Food Empire Vietnam is on track to deliver an estimated US$100 million of revenue in the current FY2025 and has also become the third-largest instant coffee player in Vietnam," says Seet.
In 1HFY2025, the company grew its revenue from southeast Asia by 25% y-o-y to US$77.5 million. Vietnam, specifically, led the charge with growth of 37% y-o-y, capturing market share from competitors.
The company is now producing around two million satchets a day. To support the growth, Food Empire is in the midst of expanding its production capacity in Vietnam by 15% next year and another 30% in 2027.
Seet expects both revenue and margin to remain strong in the current 2HFY2025 due to lower raw material costs, and that Vietnam should continue to be the company' s main growth driver.
" With its strong pipeline of projects ahead, we believe Food Empire will continue to grow steadily in the coming years. A bonus share issue may also be a possibility to improve liquidity and reward shareholders," says Seet, whose revised target price is based on a valuation multiple of 19x FY2025, up from 17x.
William Tng of CGS International, meanwhile, has reiterated both his " add" call and target price. However, Tng already has a bullish target price of $2.94.
Besides feeling upbeat over the prospects in Vietnam, Tng believes that continued business development and demand liquidity from the Monetary Authority of Singapore (MAS)&rsquo s $5 billion Equity Market Development Programme (EMDP) in 2HFY2025 will support his unchanged valuation basis of 3 s.d. above average P/E of 17x for FY2017 and FY2025.
Food Empire' s 3 cents per share interim dividend - the first time it has paid out dividends at the half-year mark, is a sign of the company' s confidence as well, reasons Tng.
Possible re-rating catalysts include improving operating margins on stabilising market demand sustained market share in its key market of Russia and a resolution to the Russia-Ukraine conflict.
Key downside risks, meanwhile, are an escalation in Russia-Ukraine conflict, thereby affecting its Russian operations, and also the depreciation of the ruble vs US dollar, leading to lower revenue in US$ terms.
RHB' s Yeo raises target price for Food Empire to $2.72
Alifie Yeo has kept his " buy" call on Food Empire and has raised his target price to $2.72 from $1.67 previously, given its longer-term growth prospects driven by capacity expansion.
" We raise FY2026-2027 earnings on better-than expected growth traction, driven by higher manufacturing capacity across Malaysia, Kazakhstan, India, and Vietnam," says Yeo in his Sept 10 note.
The instant coffee maker' s 1HFY2025 headline earnings was a net loss as it booked a one-off US$33 million loss on its redeemable exchange notes. Otherwise, core profit before tax in the same half year to June was above expectations, up 45% y-o-y to US$43 million.
Despite the net loss, Food Empire is paying an interim dividend of 3 cents. The company typically only pays a final dividend.
In conjunction with the higher revenue, Food Empire improved its gross margin to 32.9%, which is above Yeo' s expectation as well.
Having turned more positive on the company' s prospects, Yeo has raised his FY2026 and FY2027 core earnings by 13% each to take into account higher revenue and better margins.
According to Yeo, growth in the medium term should be driven by higher production capacity, which will boost sales volume.
Besides Malaysia, Food Empire is in the midst of boosting capacity in Vietnam, India and Kazakhstan between the end of this year and FY2028.
Yeo observes that Food Empire has also re-rated from 10x FY2025 earnings to 17x FY2025 earnings, in line with the broader market since his last update, on optimism over positive fund flows.
In view of the market rerating and his positive forecast, Yeo derives the new target price of $2.72 after pegging the stock to 18x blended FY2025 and FY2026 earnings, from a lower valuation multiple of 12x FY2025 earnings previously, which is in line with its peers&rsquo rerating.
Yeo warns that downside risks will come from disruptions in operations due to the Russia-Ukraine conflict, and the negative effect of a change in the value of the ruble and other emerging market currencies.
Food Empire reports net profit of US$21.5 million, declares first-ever interim dividend of S$0.03
Excluding the fair value loss of US$32.6 million, net profit after tax stands at US$31.5 million
[SINGAPORE]
This resulted from a US$32.6 million fair value loss on redeemable exchangeable notes issued by the company, as its share price rose significantly from the level at which the notes can be exchanged for shares.
&ldquo Mark-to-market adjustments to the redeemable exchange notes are required to be recognised in the group&rsquo s interim consolidated income statement, even though they are non-cash and do not reflect operating performance,&rdquo Food Empire said.
Loss per share in H1 2025 stood at US$0.0027, a reversal from earnings per share of US$0.0449 in H1 2024.
Excluding the fair value loss, Food Empire&rsquo s net profit after tax stood at US$31.5 million in H1 2025. This represents a 35.7 per cent increase compared to the year-ago period, on the back of higher revenue and gross margins across most core segments.
Revenue rose 21.7 per cent to US$274.1 million in H1, from US$225.2 million previously. Cost of sales also grew, by 16.7 per cent to US$183.9 million from US$157.6 million in the year-ago period.
Group chief executive officer Sudeep Nair said Food Empire is &ldquo on track to deliver yet another record-breaking performance in FY2025, barring unforeseen circumstances&rdquo .
&ldquo Our optimism is underpinned by the strength and leading position of our brands across all our markets as we continue to deliver robust results from our brand-building efforts,&rdquo he added.
Food Empire declared an interim dividend for the first time, &ldquo as a demonstration of strong business confidence&rdquo . The dividend of S$0.03 per share will be paid out on Sep 10.
Growth in core segments
For H1, the group said its Russia segment generated the highest revenue among its core segments, delivering a 21.6 per cent increase in sales to US$82.8 million.
&ldquo This was mainly due to price gains coupled with appreciation of the Russian ruble against the US dollar. In local currency terms, revenue rose by 17 per cent,&rdquo it added.
Vietnam, its fastest-growing market, generated more than 60 per cent of the contributions from South-east Asia. The segment recorded US$77.5 million in revenue.
Revenue from the group&rsquo s Ukraine, Kazakhstan and Commonwealth of Independent States segment grew 19.4 per cent to US$68.4 million. This was due mainly to price gains and increased sales volumes from certain markets.
The group&rsquo s South Asia segment reported revenue of US$37 million, 25.1 per cent higher than in H1 2024. This was attributed to strong demand for both freeze-dried and spray-dried soluble coffee.
Food Empire said its current project pipeline includes its first coffee-mix manufacturing facility in Kazakhstan in Central Asia, which is expected to be completed by the end of the year.
In India, the expansion of its spray-dried soluble coffee manufacturing facility by 2027 will increase the facility&rsquo s capacity by 60 per cent. A new freeze-dried soluble coffee manufacturing facility will open in Vietnam in 2028.
Food Empire Holdings
On Jul 15, independent director Adrian Chan exercised 105,000 share options at S$0.802 apiece. He is also head of corporate at the law firm, Lee & Lee, and has been in legal practice for over three decades. He was first appointed to the board of Food Empire Holdings : F03 +6.6% in January 2022. This took his direct interest in the multinational food and beverage manufacturing and distribution group to 0.02 per cent.
Food Empire owns proprietary brands such as MacCoffee, CafePHO, and Kracks, with MacCoffee leading in core markets through localised, innovative brand-building.
In its Q1 FY2025 (ended Mar 31) business update, the group reported a 16.3 per cent increase in topline revenue from Q1 FY2024 to US$136.6 million. Food Empire has long identified Asia as a key growth region, with South-east Asia &ndash led by Vietnam &ndash now its largest revenue contributor, and recent investments including a coffee-mix facility in Kazakhstan set to complete by end-2025.
On Jul 9, Food Empire announced that it will invest US$37 million to expand its coffee facility in India, boosting capacity by 60 per cent. The project, part of its vertical integration strategy, begins in Q4 2025 and completes by end-2027.
The group remain cautiously optimistic about sustaining strong top-line growth, backed by brand building and market leadership. Its Asia-focused strategy and robust expansion pipeline positions it well for emerging market demand.
At the same time, it maintains it continues to monitor macro risks &ndash such as climate-driven coffee price volatility and trade tensions &ndash and will adjust strategies to mitigate potential impacts. The group also remains confident that its strong brand equity will provide resilience against the direct impact of tariffs in the geographical segments where it operates.
With a return on equity of 17.8 per cent, the stock&rsquo s P/E ratio has increased from 7x to 17x this year, while average daily trading turnover at S$1.21 million in the 2025 year to Jul 17 has almost doubled the S$670,000 in 2024.
CGSI' s Tng raises target price for Food Empire following Santan deal
William Tng of CGS International has again raised his target price for Food Empire, on expectations that more new business opportunities are on the way with the help of well-placed investor Ikhlas Capital.
Just on June 25, Tng had raised his target price for the counter from $1.95 to $2.28. In his July 17 note, he is further hiking his target price to $2.73.
In an after market announcement on July 17, Food Empire announced a partnership with Capital A Bhd, an investment holding company, to co-develop and launch a new range of ready-to-drink beverages.
Specifically, the collaboration between their respective subsidiaries &ndash Empire International and Santan Food Services &ndash will kick off with a Vietnamese iced coffee product to be sold on AirAsia flights and through retail channels across the region.
This collaboration also paves the way for Food Empire and Santan to explore further co-branded and private label initiatives across a wider range of beverage and snack products.
The initial product rollout will span both in-flight and on-ground touchpoints.
Passengers flying with AirAsia can look forward to a co-branded Vietnamese iced coffee experience onboard.
On the ground, the same product line will also be made available at selected retail outlets under the Santan brand.
" The collaboration with Santan is, in our view, one of a number of business-related initiatives that Ikhlas Capital could be working on together with Food Empire," says Tng. " We believe there could be further business collaboration announcements in time to come."
While Tng acknowledges that the current collaboration with Santan may not be immediately earnings accretive for Food Empire, he expects it to improve the company&rsquo s brand awareness in Asia and allay investor concerns that Ikhlas Capital is only investing in for the 5.5% coupon on the redeemable equity notes issued by Food Empire.
Tng says that any potential share price weakness from the REN is a buying opportunity.
In addition, with the government soon to allocate $5 billion to fund managers to invest in smaller cap stocks, Food Empire stands to be a beneficiary and can enjoy a re-rating to towards its 3 sd P/E of 17x, suggesting a target price of $2.73.
In contrast, Tng had previously valued the company at $2.28, which is 14.2x FY26F P/E, 2s.d. above its 9-year average P/E of between FY2017 and FY2025.
Re-rating catalysts, according to Tng, includes improving operating margins on stabilising market demand sustained market share in its key market, Russia, and last but not least, a resolution to the Russia-Ukraine conflict.
On the other hand, key downside risks include the escalation in Russia-Ukraine conflict affecting its Russian operations, and the ruble&rsquo s depreciation vs. the US$, leading to lower revenue in US$ terms, which is Food Empire' s reporting currency.
Food Empire to invest US$37 mil to expand capacity in India
Food Empire Holdings plans to invest US$37 million to expand the capacity of its spray-dried soluble coffee manufacturing facility in Andhra Pradesh, India by around 60%. Work will start in 4Q this year and be done by the end of 2027.
Besides the spray-dried soluble coffee manufacturing facility, Food Empire also has a manufacturing facility for freeze-dried soluble coffee in India. The company had previously announced plans to set up another freeze-dried soluble coffee manufacturing facility in Binh Dinh, Vietnam, which is expected to be completed by 2028.
According to Food Empire, these expansion projects are part of its ongoing vertical integration initiatives so as to have better control over the entire coffee processing cycle, which will support the growth of its branded consumer business and sustain the leading position of its brands across its markets.
&ldquo Food Empire has enjoyed four consecutive years of record revenue growth driven by the stellar performance of our core branded consumer business," says group CEO and executive director Sudeep Nair.
" This has given us the confidence to expand our ingredients manufacturing business, which will not only position us strongly as a leading player in soluble coffee in Asia, but more importantly it will serve as a vital link to support the growth of our branded consumer business as we continue to invest in brand building activities across our markets," he adds.
Food Empire&rsquo s strong growth ahead not fully appreciated: CGSI
Year to date, Food Empire Holdings has gained over 80% as at July 1, but William Tng of CGS International expects further upside to this stock.
As a consumer staples company whose main product is three-in-one instant coffee, Food Empire is poised for stronger earnings growth with the opening of various new production facilities.
Better known for selling coffee in Russia and other former Soviet Republics, Food Empire has built Vietnam as a new key market with strong growth and volume.
&ldquo We think investors have yet to get a good grip on the earnings potential of Food Empire as efforts to build on the growth momentum in Vietnam for its branded business is in progress,&rdquo states Tng in his June 26 note, where he kept his &ldquo add&rdquo call but with a higher target price of $2.28 from $1.95.
Vietnam has emerged as the company&rsquo s fastest-growing market, with revenue from its branded beverage business up 46% y-o-y in 1QFY2025, driven by a larger sales force, better marketing and reinforcing brand loyalty.
Another underappreciated growth driver, in Tng&rsquo s view, is Food Empire&rsquo s food ingredients manufacturing business. The expanded manufacturing facility in Johor will start production should in 3QFY2025. Its non-dairy creamer plant, also in Johor, is also seeing an increase in capacity and utilisation rate.
In Kazakhstan, the company is building its first three-in-one coffee-mix manufacturing facility, which will be completed by the end of FY2025. Tng says the new facility will boost Food Empire&rsquo s total coffee-mix production capacity by around 14%&ndash 15%, enabling it to grow its reach in Central Asia.
This plant, which can add an annual production capacity of 850 million sachets, is on top of the company&rsquo s existing combined capacity of six billion sachets from its plants in Russia, Ukraine, Malaysia and Vietnam.
According to Tng, Food Empire&rsquo s management expects a 10% net profit margin as a &ldquo reasonable&rdquo target, considering higher operating costs and depreciation.
Last September, the company also announced it would invest US$80 million in building a new Vietnam freeze-dried soluble coffee manufacturing facility by early 2028.
Tng figures that at full utilisation, this new plant could generate revenue of US$40 million ($51 million) to US$60 million per year from FY2028 to FY2030.
Given the company&rsquo s &ldquo supportive&rdquo fundamentals, Tng has raised his target valuation multiple from 11.2 times FY2026 earnings to 14.2 times FY2026 earnings, two standard deviations above its nine-year average, leading to the higher target price of $2.28.
Even at 14.2 times, Tng says that Food Empire is still trading at a 10.7% discount to the global sector average of 15.9 times P/E, which may reflect a valuation discount for its business in the Russia-Ukraine region, which has a low probability of suffering from risks of the ongoing fight.
Tng sees another &ldquo non-fundamental&rdquo re-rating catalyst. With a market cap of US$734 million and a three-month average daily traded value of US$0.8 million, Food Empire will be a &ldquo potential investible candidate&rdquo when the $5 billion market fund from the Monetary Authority of Singapore is deployed. &ldquo The additional demand boost would help raise Food Empire&rsquo s valuation, in our view,&rdquo says Tng.
In addition, Ikhlas Capital, an investor in the company through an issue of US$40 million worth of redeemable exchangeable notes (REN), could lead to a potential secondary listing in Malaysia or Hong Kong, which could improve valuation, says Tng.
Food Empire, having last announced a one-for-five bonus issue back in 2002, can consider another issue to reward shareholders, adds Tng.
Beyond the medium term, with the new contribution from new facilities in Vietnam coming on stream in FY2028, there is potential for Food Empire&rsquo s share price to reach $2.60 to $2.95, says Tng.
On July 1, Tng maintained his call and target price even after Food Empire entered into a second supplement agreement to address certain aspects of its REN with Ikhlas Capital.
Under the new agreement, Food Empire will seek to eliminate a potential revaluation gain or loss through an accounting classification known as &ldquo fixed-for-fixed&rdquo .
The new agreement will eliminate the non-cash impact on Food Empire&rsquo s reported earnings arising from fair value gains or losses due to the share exchange feature in the REN.
Pending the valuer&rsquo s report and the final review by Food Empire&rsquo s management and board, Food Empire has guided that it may report a fair value loss in its 1HFY2025 results. This is due to the &ldquo significant increase&rdquo in its share price above the exchange price from Jan 1 to the date of the signing of the supplemental agreement.
Tng estimates the loss to be around US$20 million, which is accounting in nature and would have no impact on Food Empire&rsquo s cash flow and actual earnings power.
Food Empire' s growth unappreciated, says CGSI&rsquo s Tng, whose new target price is $2.28
William Tng of CGS International has raised his target price for Food Empire Holdings from $1.95 to $2.28, as he believes that even with an 80% gain year to date, this counter, which as a consumer staples company is more resilient to current volatility, has further room for re-rating thanks to various catalysts some of which have are not quite fully appreciated by the market.
" We think investors have yet to get a good grip on the earnings potential of Food Empire as efforts to build on the growth momentum in Vietnam for its branded business is in progress.
" Food Empire has guided that the group will continue to invest in brand-building activities to keep up its growth momentum and further entrench its position in the instant coffee-mix space in Vietnam," states Tng in his June 26 note.
Vietnam has emerged as the company' s fastest-growing market, with revenue from its branded beverage business up 46% y-o-y in 1QFY2025, driven by a larger sales force, more effective marketing which reinforced brand loyalty.
Another underappreciated growth driver, in Tng' s view, is Food Empire' s food ingredients manufacturing business. By the end of 1HFY2025, its expansion of a manufacturing facility in Johor will be done and production to begin in 3QFY2025. Its non-dairy creamer plant, also in Johor, is also seeing an increase in both capacity and utilisation rate.
Elsewhere, the company is building its first 3-in-1 coffee-mix manufacturing facility in Kazakhstan to be completed by the end of FY2025. According to Tng, this new facility will boost Food Empire' s total coffee-mix production capacity by around 14-15% and enable it to grow its reach in Central Asia.
This plant, which can potentially add an annual production capacity of 850 million sachets, will be on top of the company' s existing combined capacity of six billion sachets from its plants in Russia, Ukraine, Malaysia and Vietnam.
According to Tng, citing the management, Food Empire expects a 10% net profit margin as a " reasonable" target, after taking into account factors such as higher operating costs and depreciation.
What makes Food Empire interesting is also its growth plans over the near to medium term. Last September, the company announced it is investing US$80 million to build a new Vietnam freeze-dried soluble coffee manufacturing facility by early 2028.
Tng figures that at full utilisation, this new plant could generate revenue of US$40 million to US$60 million per year over FY2028 to FY2030 depending on product specifications and coffee prices then.
Given the company' s " supportive" fundamentals, Tng has raised his target valuation multiple from 11.2x FY2026, to 14.2x FY2026, which is 2 sd above its 9-year average, leading to the higher target price of $2.28.
Even at 14.2x, Tng says that Food Empire is still trading at a 10.7% discount to the global sector average of 15.9x PE, which may reflect a valuation discount for its business in the Russia-Ukraine region which has a low probability of suffering from risks of the ongoing fight.
Tng sees another " non-fundamental" re-rating catalyst. With a market cap of US$734 million and three-month average daily traded value of US$0.8 million, Food Empire will be a " potential investible candidate" when the $5 billion market fund from the Monetary Authority of Singapore is deployed. " The additional demand boost would help raise Food Empire&rsquo s valuation, in our view," says Tng.
In addition, with Ikhlas Capital, an investor in the company via an issue of US$40 million worth of redeemable exchangeable notes, can lead to a potential secondary listing in Malaysia, or Hong Kong, possibly improving valuation, says Tng.
Individuals behind Ikhlas Capital include Nazir Razak, former CIMB chairman and before that, group CEO, and Gita Wirjawan, Indonesia&rsquo s Minister of Trade from 2011 to 2014.
Food Empire, having last announced a 1 for 5 bonus issue back in 2002, can consider another issue to reward shareholders, adds Tng.
Beyond the medium term, with the new contribution from new facilities in Vietnam coming on stream in FY2028 onwards, there' s potential for Food Empire' s share price to reach $2.60 to $2.95, says Tng.
Citing Food Empire' s strong growth and new capacity, KGI maintains ' buy' and $1.95 target price
KGI Securities has kept its " buy" call and $1.95 target price on Food Empire Holdingsafter it recorded continued strong growth across its various markets, especially southeast and south Asia.
In particular, thanks to brand-building efforts, it was able to generate 44.6% y-o-y jump in its 1QFY2025 revenue in Vietnam.
" This has significantly boosted Food Empire&rsquo s Southeast Asia revenue contribution, taking the top spot and contributing to 29.2% of the group&rsquo s total sales in 1Q25," says KGI in its May 26 note.
" Demand for the group&rsquo s products in South Asia also remains strong amidst a coffee consumption boom in the region," adds KGI.
To meet growing demand, the company is " significantly" expanding its production capabilities across Asia, with a new freeze-dried soluble coffee facility is set to begin construction by late 2025 and become operational by 2028.
In addition, its Malaysian snack manufacturing facility will increase output by about 50% by the third quarter of 2025 after an expansion is completed in the first half. Outside Southeast Asia, Food Empire&rsquo s first coffee-mix plant in Kazakhstan is expected to be finished by the end of 2025, boosting overall coffee-mix capacity by approximately 15% and extending its reach into Central Asia.
" These strategic expansions are set to drive continued top-line growth across its key Asian markets," says KGI.
Food Empire&rsquo s target prices raised on robust 1Q
Food Empire Holdings (FEH) on May 13 announced its 1QFY2025 ended March 31 business update, which saw revenue increase by 16.3% y-o-y. This was also the first quarter that the company&rsquo s Southeast Asia segment surpassed its Russia segment, which has traditionally been the group&rsquo s largest revenue generator, for the first time, with a 33.8% y-o-y increase in revenue since 1QFY2024.
This is due to strong sales of its branded consumer products in Vietnam, which the group says is its fastest-growing market.
Revenue from Vietnam surged 44.6% in 1QFY2025, driven by an enhanced sales force, effective marketing promotions and campaigns, and interactive consumer engagement activities that reinforced brand loyalty and increased new customer acquisition.
Analysts&rsquo sentiment on FEH has turned more positive with research houses keeping their &ldquo buy&rdquo recommendations, while increasing their target prices.
Maybank Securities has previously increased its target price on FEH to $2.00 from $1.19.
Analyst Jarick Seet notes that 1QFY2025 revenue had beaten expectations. More importantly, Southeast Asia revenue now exceeds Russia&rsquo s, validating the group&rsquo s revenue diversification strategy.
&ldquo Going forward, we expect margins to improve as price increase adjustments kick in. Growth in Asia is expected to be strong, supported by a robust pipeline of capacity expansion projects currently being carried out in the region,&rdquo says Seet.
He expects Asia to be the largest growth driver for FEH, with the group completing its construction of a freeze-dried soluble coffee manufacturing facility in Vietnam by 2028. This will position it as a leading manufacturer of soluble coffee in Asia.
In Malaysia, its snack manufacturing facility will be expanded by 1H2025, while commercial output will expand capacity by 50% by 3Q2025. The newly expanded non-dairy creamer manufacturing facility will continue increasing production capacity utilisation. Finally, the construction of its first coffee-mix manufacturing facility in Kazakhstan will be completed by the end of 2025.
&ldquo Historically, Russia was FEH&rsquo s largest revenue and profit driver, leading to a valuation discount against 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 rerating with a lower discount to its peers,&rdquo says Seet.
Similarly, UOB Kay Hian has maintained its &ldquo buy&rdquo call, increasing its target price to $1.98 from $1.20.
Analysts John Cheong and Heidi Mo also note that revenue came in slightly above expectations, forming 27% of their full-year estimate.
The analysts remain cautiously optimistic about sustaining strong revenue growth because of ongoing investments in brand building and the market leadership positions of FEH&rsquo s brands.
FEH&rsquo s past investments have borne fruit and its robust expansion pipeline positions it strongly for its next growth phase. FEH&rsquo s strategic focus on Asia allows it to capitalise on high-growth emerging markets that increasingly prefer good-quality instant beverages that provide convenience and cater to busy lifestyles.
&ldquo We believe FEH is due for a rerating thanks to its increasingly better track record in delivering robust results and easing tensions in Russia and Ukraine, two key segments of FEH. We opine that FEH will continue to see business growth as it successfully passes on pricing adjustments and embarks on strategic expansion with its strong brand equity,&rdquo say Cheong and Mo.
&ldquo FEH maintains an optimistic outlook and is confident that its strong brand equity will provide resilience against the direct impact of the tariff wars,&rdquo they add.
On the other hand, CGS International has kept its &ldquo add&rdquo call, while increasing its target price on FEH to $1.95 from $1.71.
Analyst William Tng also notes that revenue came in above expectations. He also notes that management is cautiously optimistic about sustaining its topline performance ahead of time because of ongoing investments in brand building and the market leadership position of its brands.
Management guided that it does not expect FEH to be significantly affected by the US&rsquo s new tariff regime, as the US is not a major market for the group. For FY2025, management guided that revenue will be aided by the expansion of its snack manufacturing facility by 1HFY12025, with production by 3QFY2025 and a higher utilisation rate for the expanded non-diary creamer plant.
The construction of its coffee-mix manufacturing facility in Kazakhstan is expected to be completed by the end of FY2025. Management expects the plant to boost the group&rsquo s total coffee-mix production capacity by approximately 15%.
&ldquo We believe FEH&rsquo s earnings will remain resilient in the current uncertain environment as its branded products are attractively priced consumer staples,&rdquo says Tng, expecting P/E to trend upwards to 13.4 times, as the group continues to grow its net profit.
Hovering near day high of $1.69.
If there are enough shorts, it may cross $1.70 later on short coverings.
Let' s see
If there are enough shorts, it may cross $1.70 later on short coverings.
Let' s see
Food Empire get boost in target prices following bright 1Q results
Samantha ChiewWed, May 14, 2025 &bull 11:38 AM GMT+08 &bull &bull 4 min read
FY2025 is a year of growth for Food Empire. Photo: Albert Chua/ The Edge SingaporFood Empire Holdings (FEH) on May 13 announced its 1QFY2025 ended Mar 31 business update which saw revenue increase by 16.3% y-o-y. This was also the first quarter that the company&rsquo s Southeast Asia (SEA) segment surpassed its Russia segment which has traditionally been the group&rsquo s largest revenue generator for the first time, with a 33.8% y-o-y increase in revenue since 1QFY2024.
This is due to strong sales of its branded consumer products in Vietnam, which the group says is its fastest growing market.
Revenue from Vietnam surged 44.6% this quarter, driven by the combination of an enhanced sales force, effective marketing promotions and campaigns, as well as interactive consumer engagement activities that reinforced brand loyalty and increased new customer acquisition.
Analysts&rsquo sentiment on FEH has turned more positive with research houses keeping their &ldquo buy&rdquo recommendations, while increasing their target prices.
Maybank Securities has increased its target price on FEH to $2.00 from $1.19 previouslyn Mor
Analyst Jarick Seet notes that 1QFY2025 revenue had beat expectations and more importantly, SEA revenue now exceeds that of Russia, validating the group&rsquo s revenue diversification strategy.
we Going forward, weexpect margins to improve as price increase adjustments kick in. Growth in Asia is expected to be strong, supported by a robust pipeline of capacity expansion projects that are currently being carried out in the region,&rdquo says Seet.
He expects Asia to be the largest growth driver for FEH, with the group completing its construction of a freeze-dried soluble coffee manufacturing facility in Vietnam by 2028. This will position it as a leading manufacturer of soluble coffee in Asia.
In Malaysia, the expansion of its snack manufacturing facility by be completed in 1H2025 while commercial output will expand capacity by 50% by 3Q2025. The newly expanded non-dairy creamier manufacturing facility will also continue to increase production capacity utilisation. Finally, the construction of its first coffee-mix manufacturing facility in Kazakhstan will be completed by end-2025.
&ldquo Historically, Russia was FEH&rsquo s largest revenue and profit driver and this led to a valuation discount against 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,&rdquo says Seet.
Similarly, UOB Kay Hian has maintained its &ldquo buy&rdquo call, while increasing its target price to $1.98 from $1.20 previously.
Analysts John Cheong and Heidi Mo also note that revenue came in slightly above expectations, forming 27% of their full-year estimate.
The analysts remain cautiously optimistic about sustaining strong revenue growth, because of ongoing investments in brand building as well as the market leadership positions of FEH&rsquo s brands.
FEH&rsquo s past investments have borne fruits and its robust expansion pipeline positions it strongly for its next phase of growth. FEH&rsquo s strategic focus on Asia allows it to capitalise on high-growth emerging markets that have shown an increasing preference for good quality instant beverages that provide convenience and cater to busy lifestyles.
&ldquo We believe FEH is due for a rerating thanks to its increasingly better track record in delivering robust results and easing tensions in Russia and Ukraine, two key segments of FEH. We opine that FEH will continue to see business growth as it successfully passes on pricing adjustments and embarks on strategic expansion with its strong brand equity,&rdquo say Cheong and Mo.
&ldquo FEH maintains an optimistic outlook and is confident that its strong brand equity will provide resilience against the direct impact of the tariff wars,&rdquo they add.
CGS International on the other hand has kept its &ldquo add&rdquo call, while increasing its target price on FEH to $1.95 from $1.71 previously.
Analyst William Tng too notes that revenue came in above expectations. He also notes that management is cautiously optimistic of sustaining its topline performance ahead because of ongoing investments in brand building and the market leadership position of its brands.
Management guided that it does not expect FEH to be significantly affected by the US&rsquo s new tariff regime, as the US is not a major market for the group. For FY2025, management guided that revenue will be aided by the expansion of its snack manufacturing facility by 1HFY12025, with production by 3QFY2025 and higher utilisation rate for the expanded non-diary creamer plant.
The construction of its coffee-mix manufacturing facility in Kazakhstan is expected to be completed by end-FY2025 and management expects the plant to boost the group&rsquo s total coffee-mix production capacity by approximately 15%.
&ldquo We believe FEH&rsquo s earnings will remain resilient in the current uncertain environment as its branded products are attractively priced consumer staples,&rdquo says Tng, while expecting P/E to trend upwards to 13.4x, as the group continues to grow its net profit.
As at 11.30am, shares in FEH are trading 9.15% higher at $1.67.
Food Empire reports 16.3% rise in revenue for Q1
The group&rsquo s South-east Asia segment has leapfrogged Russia to emerge as its best-performing market with US$40 million in sales, up 33.8% year on year.
[SINGAPORE] Food Empire : F03 +1.32% posted a 16.3 per cent rise in its top line to US$136.6 million for the first quarter of FY2025 ended March, as most major markets delivered better performance.
However, the firm did not give its net profit for the period in the update filed with the bourse on Tuesday (May 13).
Contributing to the better performance was its dynamic pricing approach to cushion against inflationary pressures, rising operating costs and surging coffee bean prices, Food Empire said.
Vietnam stood out as revenue from the South-east Asian nation surged 44.6 per cent, driven by an enhanced sales force, effective marketing, as well as interactive consumer engagement activities that reinforced brand loyalty, it added.
Vietnam helped Food Empire&rsquo s South-east Asia market to leapfrog Russia &ndash its traditional top revenue market &ndash and emerge as its best-performing market with US$40 million in sales, up 33.8 per cent year on year.
Calling this an inflexion point in the group&rsquo s Asia-centric strategy, chief executive Sudeep Nair expects the group&rsquo s performance in Asia to be driven by its strong brand positions and supported by the pipeline of capacity expansion projects currently being carried out in the region.
Construction of a freeze-dried soluble coffee manufacturing facility in Binh Dinh Province, Vietnam, is expected to commence by the end of 2025 and be completed by 2028.
Commercial output from the new snack manufacturing facility in Malaysia will be ready in the third quarter, which will expand output capacity by approximately 50 per cent.
Construction of its first coffee-mix manufacturing facility in Kazakhstan is projected to be completed by end-2025 and will boost the group&rsquo s total coffee-mix production capacity by approximately 15 per cent.
In spite of the tariff turmoil, Food Empire does not expect any major impact because the US is not a significant market for the group.
RHB raises target price for Food Empire to $1.67 on steady sales growth and capacity expansion
Alfie Yeo of RHB Bank Singapore has kept his " buy" on Food Empire Holdings along with a raised target price of $1.67 from $1.23 previously, on optimism over the coffee and snack maker' s longer-term growth prospects underpinned by expanding capacity.
In the meantime, Food Empire, with its domestic-focused businesses, is seen to have " minimal" exposure from the impact of the US tariffs.
" We raise FY2025 to FY2026 earnings on better revenue traction, including higher operating costs," says Yeo in his April 24 note.
His revised target price of $1.67 is based on 12x FY2025 earnings, which is still below 15x accorded to regional peers. His previous valuation multiple was 9x earnings.
According to Yeo, Food Empire' s growth in the medium term will be driven by more production facilities which will boost sales volume.
For example, Malaysia' s snack production capacity is set to expand by 1HFY2025. Its first new coffee-mix factory in Kazakhstan is scheduled to open by FY2025.
It will also increase its production capacity for coffee mixes by 15%. Finally, a new freeze-dried soluble coffee manufacturing facility in Vietnam has been planned to open by FY2028.
" With medium-term growth drivers intact, Food Empire is well positioned for longer-term growth," says Yeo.
" Growth momentum remains strong and revenue continues to be driven by strong demand and sell through existing markets," he adds.
Yeo notes that in FY2024, Food Empire was able to continue to chalk up better sales in its various markets, including Russia, which enjoyed a 7.3% growth in sales in local currency terms in FY2024 but just down -1.1% y-o-y when reported in Singdollar.
On the back of strong revenue traction and sell through, Yeo says he now has a more positive revenue forecast.
" We have reduced our margin assumptions to reflect the current cost run rate due to higher coffee prices. We can expect Food Empire to pass through the higher input costs to customers eventually," says Yeo, who has raised his FY2025 earnings estimate by 8% and that for FY2026 by 7%.
For Yeo, downside risks to his 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 currencies of the former Soviet states.