Food Empire - UOB Kay Hian 2023-11-10: Raise Target Price By 20%; 3Q23 Results Beat Expectations As Demand Still Reigns In Core Markets

• Food Empire’s 3Q23 net profit of US$15.7m (+106.6% y-o-y, +22.7% q-o-q) was above expectations, with 9M23 making up 84.6% of our full-year forecast. Despite currency fluctuations, Food Empire reported record-high 9M23 revenue.
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• We believe earnings growth will continue as demand across its core markets remains robust, and raise 2023/24/25 earnings forecast for Food Empire by 8%/9%/6%.
• Maintain BUY recommendation on Food Empire with a 20%-higher target price of S$1.63 (S$1.36 previously).

3Q23 results above expectations.

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• The record-high 9M23 revenue of US$305.1m (+6.7% y-o-y) was mainly driven by higher volumes and/or higher ASPs across Food Empire’s core business segments.
• Gross margin also improved 5.3ppt y-o-y to 34.3% as a result of a favourable sales mix of products with higher margins.

Revenue growth in spite of currency depreciation.

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John Cheong UOB Kay Hian Research | Heidi Mo UOB Kay Hian | https://research.uobkayhian.com/ 2023-11-10 SGinvestors.io

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