- Food Empire's revenue for 1Q25 surged 16.3% y-o-y to US$136.6m, driven by growth in Vietnam (44.6% y-o-y), which beat our expectation. Most importantly, its Southeast Asia (SEA) revenue now exceeds that of Russia, validating the group’s revenue diversification strategy.
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Russia no longer the largest revenue generator.
- Revenue from Southeast Asia overtook Russia as the largest revenue segment at US$40m, up 33.8% y-o-y, driven by Vietnam’s revenue growth 44.6% y-o-y in 1Q25.
- Ukraine, Kazakhstan and CIS market segments also saw positive revenue growth of 14.9% y-o-y to US$33.9m, driven by Kazakhstan which reflected the contribution from Tea House LLP.
Asia will be biggest growth driver.
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- In Malaysia, the expansion of its snack manufacturing facility by be completed in 1H25 while commercial output will expand capacity by 50% by 3Q25. 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.
Maintain BUY with a higher target price of S$2.00.
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