Introduction
This report provides an in‐depth analysis of Food Empire Holdings Ltd (FEH) based on its recent FY24 performance, key financials, and growth strategies. It also offers a detailed peer comparison covering a host of regional and international companies in the Food & Beverages sector. The content below captures every detail—from revenue breakdowns and profit margins to strategic expansions and dividend policy—to help readers understand market positioning and objectives, with the recommendations clearly stated for each company.
Food Empire Holdings Ltd – Deep Dive Analysis
FY24 Financial Performance
Food Empire Holdings delivered a robust FY24 performance with revenue reaching US\$476.3 million, a year‐on‐year growth of 11.9%, which came 5.7% above the forecast and was in line with Bloomberg consensus expectations. The company reported a core net profit of US\$49.7 million, down 12.0% year‐on‐year but still 7.9%/7.0% ahead of both internal and Bloomberg full‐year forecasts owing to better profit margins.
Regional Business and Revenue Breakdown
The company’s performance was driven by its strong presence outside Russia. The Southeast Asia segment, constituting 27.2% of FY24 revenue, grew by 27.3% year‐on‐year. The South Asia segment, despite representing a smaller portion at 12.9% of total revenue, saw growth of 24.9% year‐on‐year. Although revenue from Russia exhibited a 1.1% decline in US\$ terms due to foreign exchange translation impacts, local currency figures showed a 7.3% growth.
Cost Structure and Dividend Policy
Detailed analysis reveals that for its flagship 3-in-1 coffee mix, approximately 70% of the cost is incurred on raw materials—split equally between coffee and creamer (30% each) and 10% for sugar. The remaining 30% comes from factory overheads including utilities, depreciation, labor, and packaging. In addition, the company declared a final dividend per share (DPS) of 6.0 Scts alongside a special DPS of 2.0 Scts.
Growth Strategy and Future Expansion
FEH’s management has outlined a clear growth roadmap for the next three years. Key points include strengthening brand presence in Vietnam and Malaysia, and ramping up capacity by fully utilizing a newly added creamer manufacturing facility by 2-3 years. Further expansions include the Malaysian snack manufacturing facility set to complete by 1Q25F (with commercial production by 2Q25F), a new coffee-mix production facility in Kazakhstan by end-FY25F, and a freeze-dried soluble coffee manufacturing facility in Vietnam targeted for completion in 2028F.
Price Target and Recommendation
Based on the robust growth potential from the Vietnam operations and the expected expansion of the food ingredients business, revenue forecasts for FY25-26 have been raised by 5.7%. Consequently, EPS forecasts have seen an increase of 9.8% and 11.2% for FY25 and FY26, respectively. With an unchanged 11.2x P/E multiple, the target price has been raised to S\$1.71. The recommendation for Food Empire Holdings remains as Add, with key re-rating catalysts including improved operating margins, sustained market share in Russia, and a favorable resolution to the Russia-Ukraine conflict.
Financial Summary Snapshot
The financial summary details the steady revenue and margin expansion. Highlights include:
• Revenue growing from US\$425.7m in Dec-23A to an estimated US\$565.4m by Dec-27F.
• Operating EBITDA margin improving gradually from 19.2% in Dec-23A to 17.3% by Dec-27F.
• A well-managed balance sheet with shareholders’ equity rising consistently.
• A commitment to delivering strong free cash flow and attractive dividend yields, with a potential dividend yield of 7.5%.
Peer Comparison – Deep Dive Analysis
The report extends its analysis to a broad range of peers in the food and beverage space, comparing fundamental metrics, market performances, and recommendations. Below is a comprehensive deep dive into each company covered in the analysis:
Food Empire Holdings Ltd (FEH SP)
Recommendation: Add
Current Price/Target Price: S\$1.07 / S\$1.71
Market Cap: US\$421m (or equivalently S\$563.2m)
Key Financials: EPS forecasts rising with FY26 EPS expectations boosted by growth in Vietnam and the food ingredients business.
Dividend Yield: 7.5% – a very attractive proposition for income-seeking investors.
Ajinomoto Co Inc (2802 JP)
Recommendation: Not Rated (NR)
Market Cap: US\$5,913m
Financial Highlights: With revenue figures reaching US\$20,236m, the company shows a strong global presence. However, a significant decline in EPS by 29.2% has been noted. The company has relatively high profit margins with an EPS of 24.1% in CY25F and 22.5% in CY26F, alongside a higher P/BV multiple of 3.62.
Fraser & Neave Holdings (FNH MK)
Recommendation: Add
Valuation: Trading at a price of S\$25.88 with an upward target of S\$36.50.
Market Cap: US\$2,144m
Growth Implications: Although some key metrics are not available (noted as “na”), the overall sentiment remains positive with a sector-leading dividend yield of 15.6%.
Jumbo Group Limited (JUMBO SP)
Recommendation: Add
Valuation: With a current price of S\$0.27 and a target price of S\$0.36, the market cap stands at US\$121m. Notable EPS figures with a forward P/E of 10.5 indicate stability, coupled with an attractive dividend yield of 23.4%.
Kimly Group (KMLY SP)
Recommendation: Hold
Overview: Trading at S\$0.32 with only a slight increase to S\$0.34, the company has a market cap of US\$293m. Although the EPS and profit margins are solid (with an 11.3% EPS figure), a conservative recommendation is issued under current market conditions.
Mayora Indah Tbk (PT MYOR IJ)
Recommendation: Not Rated (NR)
Overview: With a market cap of US\$2,290m and annual revenues touching US\$2,951m, the company exhibits strong financial fundamentals. Key metrics such as EPS (14.6% for CY25F and 12.7% for CY26F) indicate robust performance, though it is maintained at NR without a direct recommendation.
Monde Nissin Corp (MONDE P)
Recommendation: Not Rated (NR)
Valuation: Trading at S\$8.05, the company has a market cap of US\$2,538m with EPS growth prospects of 13.5% for CY25F and 12.3% for CY26F. Moderate dividend yield and a consistent performance profile keep the recommendation neutral.
Nestle (Malaysia) (NESZ MK)
Recommendation: Reduce
Overview: Valued at S\$88.48 with a target adjustment to S\$78.00, and a market cap of US\$4,685m, the company’s current metrics have prompted a “Reduce” recommendation despite being a major player.
Nestle SA (NESN SW)
Recommendation: Not Rated (NR)
Financials: With a current trading price of S\$85.10 and a massive market cap of US\$255,838m, Nestle SA’s EPS is projected at 18.7 in CY25F and 17.6 in CY26F. The dividend yield of approximately 7.6% and a P/BV of 6.37 underwrite a neutral stance.
Nissin Foods Holdings Co Ltd (2897 JP)
Recommendation: Not Rated (NR)
Details: A market cap of US\$2,928m, along with EPS forecasts indicating 15.2 for CY25F and 14.1 for CY26F, reflects moderate performance. The EPS drop of 33.9% has influenced the overall rating to remain NR.
Nongshim Co Ltd (004370)
Recommendation: Not Rated (NR)
Key Metrics: With a very large market cap of US\$350,000m and revenues around US\$1,483m, the company shows stable EPS forecasts (11.4 in CY25F and 10.4 in CY26F) along with an attractive dividend yield of approximately 7.0%.
Power Root Bhd (PWRT MK)
Recommendation: Hold
Outlook: Trading at S\$1.43 with a marginal target of S\$1.45 and a market cap of US\$138m, Power Root Bhd demonstrates healthy EPS growth (13.5% for CY25F and 12.7% for CY26F) with a dividend yield around 13.1%, yet the recommendation remains cautious at Hold.
TAC Consumer PCL (TACC TB)
Recommendation: Not Rated (NR)
Highlights: With a trading price of S\$4.22 and a market cap of US\$74m, TAC Consumer exhibits EPS figures of 9.1% with an attractive dividend yield of 36.9% for CY26F. However, the overall mix of metrics places this company in the NR category.
Thai Beverage (THBEV SP)
Recommendation: Add
Market Overview: Trading at S\$0.52 with the potential to reach S\$0.58 and supported by a high market cap of US\$9,762m, Thai Beverage shows strong EPS prospects (11.9% in CY25F) and a solid dividend yield of 17.9%. The recommendation is clearly tilted towards an Add.
Toyo Suisan Kaisha Ltd (2875 JP)
Recommendation: Not Rated (NR)
Insights: At S\$9,063 with a market cap of US\$6,693m, Toyo Suisan’s EPS growth—15.3% for CY25F and 13.9% for CY26F—along with a dividend yield of approximately 13.2% anchors it in the NR group, with no explicit buy recommendation.
Uni-President Enterprises (1216 T)
Recommendation: Not Rated (NR)
Profile: Uniting revenue potential with a market cap of US\$14,181m, Uni-President Enterprises shows robust EPS figures estimated at 19.1 for CY25F and 17.9 for CY26F. The consistent dividend yield of 19.3% and a P/BV advantage of 3.42 maintain its NR standing.
Universal Robina Corp (URC PM)
Recommendation: Not Rated (NR)
Financial Snapshot: With a trading price of S\$74.45 and a market cap of US\$2,568m, Universal Robina presents an EPS of 13.1 for CY25F and 11.7 for CY26F. A modest dividend yield around 10.2% supports its overall NR rating.
Yakult Honsha Co Ltd (2267 J)
Recommendation: Not Rated (NR)
Overview: Trading at S\$2,940 with a market cap of US\$7,013m, Yakult Honsha is characterized by EPS projections of 16.4 for CY25F and 16.7 for CY26F. With a conservative dividend yield of 8.6% and a slight EPS decline of 35.6% noted, it remains in the NR category.
Recommendation Framework Summary
The research report reinforces that a total return expectation combining capital appreciation and forward net dividend yield is used to determine stock ratings. The framework defines “Add” for stocks expected to outperform with total returns above 10% over 12 months, “Hold” for returns between 0% and 10%, and “Reduce” for those projected to underperform.
Within the sample of 598 companies covered, approximately 67.4% are rated “Add”, reflecting strong confidence in the long-term potential and stability of companies such as Food Empire Holdings Ltd and Thai Beverage, while certain industry giants like Nestle (Malaysia) have been recommended for reduction.
Conclusion
This comprehensive report by CGS International Securities Singapore Pte. Ltd. on Food Empire Holdings Ltd and its peers provides detailed insights into the financial performance, strategic positioning, and future growth prospects across the region. Each company’s deep dive analysis offers investors a transparent view of the current market dynamics, enabling informed decision-making for a sector that continues to innovate and expand globally.
