Excerpts from RHB report

Analyst: Jarick Seet

Investment Merits

Food Empire

Share price: 
87.5 c


· Significantly undervalued - trading at 11x FY21F P/E vs peers' 20-30x;
• Strong performance expected for FY21F;
• Aggressive share buybacks.

Company Profile
Food Empire is a global food and beverage company that manufactures and markets instant beverages, frozen convenience food, confectionery and snack food. The company's products can be found in over 50 countries across Asia, Africa, Middle East, North America and Europe.



The worst is over. While revenue was down YoY, across all the markets, strong sequential improvement was seen from 2020. Management highlighted that demand for instant coffee products has been stable.

It noted that previous strict national lockdowns had resulted in operational and logistical issues, causing sales volume to decrease temporarily - the company has since learnt how to solve these issues, and is unlikely to face such issues going forward.

We expect demand to remain resilient, and increase in FY21F. Management has also revealed that marketing and administrative costs should remain low for FY21F despite revenue likely rebounding further

A strong rebound in FY21F. We expect a much stronger FY21F.


Ordinary dividend

Special dividend


2.2 cents



1 cent

1 cent


0.68 cent



0.6 cent



0.6 cent


Our SGD1.27 TP is pegged to a 15x FY21F PIE, as its local and regional staples peers are trading at a significant premium of 20-30%.

The RUB appreciated at the end of Nov 2020, and this will be beneficial for the group.

Management declared a record FY20 DPS of 2.2 SG cents. We expect FY21F final dividend to exceed that of last year's dividend.

Top Pick for consumer stocks in Singapore

JarickSeet3.18Jarick Seet, analystAt 11x FY21F PIE, Food Empire is among the cheapest consumer staples with a proven track record, with its peers trading at 20-30x P/E. With the company being a market leader in Russia and Ukraine, we remain bullish and maintain our BUY call.

Privatisation may be a possibility, given its undervalued status. Management aggressively conducted company share buybacks in Dec 2020 and Jan 2021.

It recently resumed another round with the latest buyback at SGDO.94 as management thinks that the share price is deeply undervalued vs peers and acquisition targets. We believe that management will likely continue its share buyback purchases.

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