Broker: CGS International
Date of Report: July 8, 2025
Food Empire Holdings: Robust Growth, Potential Bonus Issue, and Peer Insights in Asia’s Food & Beverage Sector
Overview: Food Empire Holdings Poised for a Landmark Year
Food Empire Holdings Ltd (FEH), a leading Singapore-based food and beverage company, is on track for a strong 2025, marking its 25th anniversary as a listed company. With anticipated double-digit revenue and profit growth, a potential bonus issue, and sustained expansion across key markets, FEH stands out in the sector. The company’s performance is especially notable as Singapore also celebrates its 60th birthday, offering a unique opportunity for shareholder rewards and heightened market presence.
Key Financial Highlights and Growth Trajectory
- 1H25F Revenue and Profit: Projected to reach US\$261 million (+16% year-on-year), with core net profit estimated at US\$30 million (+27% year-on-year, +15% half-on-half).
- Strong Q1 Performance: 1Q25 revenue grew 16% year-on-year, setting the pace for the first half to contribute about 50% of full-year revenue.
- Dividend Policy: FEH typically announces only a final and special dividend (if any) at year-end. No interim dividend is expected for 1H25F.
Potential Bonus Issue for 25th Anniversary and SG60
- FEH’s share price is at its highest since its 2000 listing. The dual milestone—25 years listed and Singapore’s 60th birthday—positions the board to consider a bonus issue for shareholders.
- A bonus issue, while not altering valuation, increases trading liquidity. This aligns strategically with upcoming updates to the S\$5bn Equity Market Development Programme (EMDP) by the Monetary Authority of Singapore (MAS).
- Higher trading liquidity may also attract larger institutional fund managers.
- The last bonus issue was in 2008 (1 bonus share for every 5 held).
Share Price Outlook and Recommendation
- Current Price: S\$1.86
- Target Price: S\$2.28 (22.6% upside)
- Any share price weakness from the US\$20m non-cash revaluation loss on its Redeemable Exchange Note (REN) is viewed as a buying opportunity.
- Recommendation: Add (no change)
- TP based on 14.2x FY26F P/E, 2 standard deviations above the 9-year average, supported by a 10.3% EPS CAGR (FY24-27F).
Key Catalysts and Risks
- Re-rating Catalysts:
- Improving operating margins with stabilizing market demand
- Maintaining market share in Russia
- Resolution to the Russia-Ukraine conflict
- Downside Risks:
- Escalation of the Russia-Ukraine conflict impacting Russian operations
- Depreciation of the ruble vs. the US dollar, reducing reported revenue
- Awaiting updates on initiatives proposed by Ikhlas Capital following REN issuance
Food Empire Holdings: Financial Summary Table
| Year (Dec) |
Revenue (US\$m) |
Operating EBITDA (US\$m) |
Net Profit (US\$m) |
Core EPS (US\$) |
Core EPS Growth (%) |
FD Core P/E (x) |
DPS (US\$) |
Dividend Yield (%) |
EV/EBITDA (x) |
P/FCFE (x) |
Net Gearing (%) |
P/BV (x) |
ROE (%) |
| 2023A |
425.7 |
81.7 |
56.51 |
0.11 |
(5.0) |
13.64 |
0.075 |
5.13 |
8.15 |
20.5 |
(30.6) |
2.59 |
19.7 |
| 2024A |
476.3 |
75.0 |
52.91 |
0.10 |
(10.7) |
15.28 |
0.060 |
4.11 |
9.48 |
114.1 |
(16.2) |
2.60 |
17.0 |
| 2025F |
522.6 |
89.7 |
60.02 |
0.11 |
19.8 |
12.75 |
0.060 |
4.11 |
7.79 |
18.2 |
(18.4) |
2.37 |
19.5 |
| 2026F |
572.0 |
101.8 |
65.73 |
0.12 |
9.5 |
11.64 |
0.060 |
4.11 |
6.79 |
16.6 |
(18.8) |
2.14 |
19.4 |
| 2027F |
604.1 |
110.9 |
70.98 |
0.13 |
8.0 |
10.78 |
0.060 |
4.11 |
6.06 |
14.9 |
(21.8) |
1.93 |
18.9 |
Peer Comparison: How Food Empire Stacks Up in Asia
| Company |
Ticker |
Reco. |
Price (LC) |
Target Price (LC) |
Market Cap (US\$m) |
P/E CY25F |
P/E CY26F |
3-Year EPS CAGR (%) |
P/BV CY25F |
ROE CY25F (%) |
Dividend Yield (%) |
| Food Empire Holdings Ltd |
FEH SP |
Add |
1.84 |
2.28 |
760 |
12.6 |
11.5 |
10.3 |
2.35 |
19.5 |
4.1 |
| Ajinomoto Co Inc |
2802 JP |
NR |
3,955 |
NA |
27,267 |
56.7 |
28.5 |
30.2 |
5.32 |
14.9 |
1.2 |
| Fraser & Neave Holdings |
FNH MK |
Add |
28.80 |
36.50 |
2,494 |
18.1 |
na |
na |
2.64 |
15.6 |
2.9 |
| Mayora Indah Tbk PT |
MYOR IJ |
NR |
2,140 |
NA |
2,912 |
15.5 |
13.1 |
11.5 |
2.52 |
17.1 |
2.5 |
| Monde Nissin Corp |
MONDE P |
NR |
7.29 |
NA |
2,391 |
12.4 |
11.4 |
223.5 |
2.04 |
17.3 |
2.9 |
| Nestle (Malaysia) |
NESZ MK |
Reduce |
77.10 |
78.00 |
4,269 |
32.8 |
30.2 |
na |
30.85 |
96.7 |
2.8 |
| Nestle SA |
NESN SW |
NR |
79.27 |
NA |
252,635 |
18.3 |
17.1 |
5.7 |
5.24 |
29.5 |
3.9 |
| Nissin Foods Holdings Co Ltd |
2897 JP |
NR |
3,006 |
NA |
5,956 |
16.3 |
14.8 |
5.7 |
1.75 |
11.7 |
2.4 |
| Nongshim Co Ltd |
004370 |
NR |
395,500 |
NA |
1,756 |
12.8 |
11.7 |
10.3 |
0.85 |
6.7 |
1.3 |
| Power Root Bhd |
PWRT MK |
Hold |
1.34 |
1.34 |
134 |
14.6 |
13.3 |
na |
1.88 |
13.0 |
5.9 |
| TAC Consumer PCL |
TACC TB |
NR |
4.42 |
NA |
82 |
9.5 |
8.8 |
12.9 |
3.42 |
37.6 |
10.0 |
| Thai Beverage |
THBEV SP |
Add |
0.47 |
0.56 |
9,138 |
10.9 |
na |
na |
1.83 |
17.6 |
5.5 |
| Toyo Suisan Kaisha Ltd |
2875 JP |
NR |
9,395 |
NA |
6,894 |
15.0 |
14.3 |
4.4 |
1.80 |
12.9 |
2.3 |
| Uni-President Enterprises |
1216 T |
NR |
82.50 |
NA |
16,396 |
19.6 |
18.4 |
10.3 |
3.38 |
17.9 |
4.1 |
| Universal Robina Corp |
URC PM |
NR |
90.10 |
NA |
3,567 |
15.3 |
14.4 |
7.7 |
1.63 |
10.3 |
4.3 |
| Yakult Honsha Co Ltd |
2267 J |
NR |
2,680 |
NA |
6,050 |
17.8 |
16.1 |
3.3 |
1.35 |
8.1 |
2.5 |
Simple average (excluding Food Empire): P/E CY25F: 19.0x, P/BV CY25F: 4.43x, ROE CY25F: 21.8%, Dividend Yield: 3.6%
ESG & Country Risk: Key Considerations
- FEH faces country concentration risk with 30% of FY24 revenue from Russia and 7% from Ukraine. To diversify, FEH is growing its 3-in-1 coffee mix business in Vietnam and its food ingredients business in India and Malaysia.
- Product safety is a core concern; FEH achieved zero non-compliance incidents with health, safety, and labelling regulations in FY24.
- Environmental efforts include energy-saving initiatives in Food Empire Vietnam: day/night light systems, solar perimeter lighting, sky lights, and LED lamps.
Detailed Financials: Cash Flow and Balance Sheet Snapshots
Cash Flow Highlights (US\$m)
| Year |
EBITDA |
Operating Cashflow |
Capex |
Free Cashflow to Equity |
Dividends Paid |
Total Cash Generated |
| 2023A |
81.75 |
53.86 |
(12.16) |
37.65 |
(17.29) |
9.95 |
| 2024A |
74.96 |
25.52 |
(24.43) |
6.70 |
(39.16) |
0.00 |
| 2025F |
89.68 |
62.13 |
(20.00) |
42.13 |
(31.41) |
10.72 |
| 2026F |
101.82 |
76.06 |
(30.00) |
46.06 |
(31.41) |
14.65 |
| 2027F |
110.89 |
81.44 |
(30.00) |
51.44 |
(31.41) |
20.03 |
Balance Sheet Highlights (US\$m)
| Year |
Total Cash |
Total Debtors |
Inventories |
Total Assets |
Total Liabilities |
Shareholders’ Equity |
| 2023A |
131.3 |
42.4 |
76.7 |
402.9 |
108.4 |
295.6 |
| 2024A |
130.9 |
54.0 |
110.8 |
460.1 |
164.0 |
293.8 |
| 2025F |
142.7 |
58.9 |
121.4 |
494.5 |
169.8 |
322.4 |
| 2026F |
150.3 |
64.0 |
133.8 |
534.6 |
175.6 |
356.7 |
| 2027F |
169.8 |
67.3 |
141.3 |
577.9 |
179.4 |
396.3 |
Key Metrics and Operational Ratios
- Revenue Growth (2025F): 9.7%
- Operating EBITDA Margin (2025F): 17.2%
- Net Cash Per Share (2025F): US\$0.11
- Book Value Per Share (2025F): US\$0.61
- Gross Interest Cover (2025F): 13.45x
- Effective Tax Rate (2025F): 20.0%
- Net Dividend Payout Ratio (2025F): 52.3%
- Accounts Receivable Days (2025F): 36.3
- Inventory Days (2025F): 121.0
- Accounts Payables Days (2025F): 61.15
- ROIC (2025F): 30.5%
- ROCE (2025F): 19.9%
- Return on Average Assets (2025F): 12.9%
Conclusion: Food Empire Holdings – A Compelling Play in Asian F&B
Food Empire Holdings continues to deliver strong earnings growth and margin expansion, supported by robust performance in its key markets and ongoing diversification. The possibility of a bonus issue in 2025 could further boost shareholder value and liquidity. With a positive outlook, attractive valuation versus peers, and disciplined financial management, FEH remains a compelling investment candidate for those seeking exposure to the Asian food and beverage sector.
Broker Rating and Sector Outlook
- Stock Rating: Add (total return expected to exceed 10% over the next 12 months)
- Sector Outlook: Positive, with a focus on growth, liquidity, and operational resilience
- Peer Group: FEH is competitive across P/E, yield, and ROE metrics, standing out for its strong growth and prudent capital allocation
