- We continue to like Food Empire (SGX:F03) for its strong balance sheet, cash generation ability, market share traction, valuation, and growth led by capacity expansion.
- We cut FY25F and FY26F earnings by 2% each, on higher depreciation due to the construction of new plants. Our new Food Empire's target price is now based on 9x FY25F P/E – this lower multiple accounts for revenue and margin headwinds including price challenges in Russia and elevated coffee prices.
Starts new coffee manufacturing facility investment in Vietnam.
- - Read this at SGinvestors.io -
- - Read this at SGinvestors.io -
- The new facility will help to increase the production of freeze-dried soluble coffee, in addition to its existing manufacturing facility in India. This will help Food Empire to diversify and grow its ingredients business to become a key player in spray-dried and freeze-dried soluble coffee.
- Construction is expected to start in 1Q25, and scheduled to be completed in early 2028. Food Empire recently raised US$40m of redeemable exchangeable notes from Ikhlas Capital, and this will come in handy to help fund this Vietnam expansion, in our view.
Reduce FY25F and FY26F earnings by 2% each.
- Read more at SGinvestors.io.
Alfie Yeo RHB Securities Research | https://www.rhbgroup.com/ 2024-09-16
Previous report by RHB:
2024-09-02 Food Empire - Capacity Expansion Driving Growth; Maintain BUY.
Price targets by 3 other brokers at Food Empire Target Prices.
Listing of research reports at Food Empire Analyst Reports.
Relevant links:
Food Empire Share Price History,
Food Empire Announcements,
Food Empire Dividends & Corporate Actions,
Food Empire News Articles
