Food Empire - UOB Kay Hian 2025-01-20: Setting The Stage For Diversification

• We estimate Food Empire's 2H24 net profit at US$22m-23m and full-year net profit at US$46m-47m. Expect margins to be softer y-o-y due to stubbornly high coffee prices.

New office at Asia Green.

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2H24 results preview: Likely in line with expectations.

• Food Empire will be releasing its financial results for 2H24 on 26 Feb 25 after trading hours. We are expecting 2H24 net profit at US$22m-23m (vs 1H24: US$24m, 2H23: US$30m). This will bring full-year net profit to US$46m-47m.
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Tapping into growing Southeast Asian coffee market with new Vietnam facility.

• Food Empire has invested US$80m into a new freeze-dried coffee manufacturing facility in Binh Dinh, Vietnam, located near coffee-growing regions and funded by both borrowings and internal resources. This strategically positions the company to leverage low production costs, access quality coffee beans, and tap into the growing Southeast Asian coffee market.
• Food Empire’s second coffee facility will commence construction in 1Q25, and is expected to be completed by early-28. We think that this vertical expansion will grow its ingredients business and strengthen the company’s presence in the rapidly growing Southeast Asian market, while effectively diversifying away from Russia.

New accolades showcase brand excellence.

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John Cheong UOB Kay Hian Research | Heidi Mo UOB Kay Hian Research | https://research.uobkayhian.com/ 2025-01-20 SGinvestors.io

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