Food Empire

Just tried their  3 in 1 premium instant coffee, I would say is nice and creamy that is something I like.
Worth it!

Selling and distribution expenses were lower by US$4.6 million or 19.1% from US$24.3 million in 1H2018 to US$19.7 million. The decrease was mainly due to rationalisation of business.

General and administrative expenses increased by US$0.6 million from US$18.3 million in 1H2018 to US$18.9 million. The increase was mainly attributed to higher manpower cost. Foreign exchange gain was US$0.8 million in 1H2019 as compared to a foreign exchange loss of US$1.6 million in 1H2018.

Pursuant to the above, the Group’s net profit after tax for 1H2019 was US$13.1 million, a yoy increase of 39.7%. Net profit margin was 2.8 percentage points (“pp”) higher, at 9.4% for 1H2019. As at 30 June 2019, the Group’s balance sheet remained healthy with cash and cash equivalents amounting to US$38.5 million.

Commenting on the Group’s results, Mr. Tan Wang Cheow, Executive Chairman of Food Empire said, “The Group continues to perform well, with strength in our core business markets and key operating segments. As we seek to sustain this growth trajectory into the future, we will be looking at new product developments and strategic mergers & acquisitions to grow our business further. On a full financial year basis, we are committed to delivering profit growth.”

Outlook


The global economy is projected to grow at a slower pace for the remaining half of 2019, driven by continuing trade tensions between the U.S. and China which might affect global oil prices and currency exchange rates against the US dollar. Barring unforeseen circumstances, the Group expects our business to remain resilient and we will continue to focus our efforts to grow key markets, rationalise business operations and consolidate our Group structure so as to create a stronger foundation for future development.

Half year EPS of about 3.56 Singapore cents , yearly is about 6.8 cents, PE is merely 7.6x base on the closing price of 49.5 cents.

This is vastly undervalue. The industry average price is about 18-20x .
I still remember when Super Group was being taken over/privatized at PE 32x.

With their Net Profit margin rising to 9.4% for the first Half year financial result we may likely see it approaching 10% pretty soon.

Net debts to equity ratios is also pretty healthy at 0.48% which is staying well below the 1% level.

Debt to Equity Ration = Total Liabilities / Shareholder's Equity = 93310 / 190531 = 0.48%


NAV is about S$0.49.
P/B is about 1x.

Dividend of 6.8 cents. Yield is 1.2%.
I believe they can afford to payout more for dividend.

I think the Fair value is about PE 15x that would give us a target price of $1.02.

The current price of 49.5 cents is almost trading below 50%.

This could jolly well be the next gems.

Not a call to buy or sell.

Pls dyodd.