UOB Kay Hian
August 15, 2025

Food Empire Holdings Delivers Robust 1H25 Results: Revenue Soars, Margins Expand, and Strategic Growth Initiatives Set Stage for Further Gains

Strong Set of Results Fuels Upgraded Outlook for Food Empire Holdings

Food Empire Holdings (FEH), a global consumer staples group specializing in instant beverages, frozen convenience foods, confectioneries, and snacks—primarily exporting to Russia, Eastern Europe, Central Asia, the Middle East, and Indochina—has reported stellar first-half 2025 results. The company not only beat earnings expectations but also lifted its growth trajectory, underpinned by double-digit sales growth across all core markets and strategic investments that promise further upside.

At-a-Glance: Key Stock Data

• Share Price: S\$2.30
• Target Price: S\$2.73 (up from S\$2.40)
• Upside Potential: +18.6%
• Market Cap: S\$1,215.2m (US\$948.4m)
• Shares Issued: 528.3m
• Major Shareholders: Anthoni Salim (24.6%), Tan Wang Cheow (22.5%)
• FY25 NAV/Share: US\$0.61
• FY25 Net Cash/Share: US\$0.21

1H25 Financial Highlights: Revenue, Margins, and Profitability Surge

FEH delivered a remarkable performance, with core 1H25 profit after tax and minority interests (PATMI) rising 32% year-on-year to US$31 million, 8% ahead of analyst forecasts. The company’s revenue climbed 22% year-on-year to US$274 million, fueled by robust double-digit expansion across all major geographies. Gross profit jumped 33% to US$90.2 million, with gross margin expanding to 32.9% (up 2.9 percentage points).
Notably, while reported PATMI was a loss of US$1.5 million due to a one-off, non-cash fair value loss of US$32.6 million on redeemable exchangeable notes, the underlying core PATMI soared, reflecting true operating momentum.

Key Financial Table (US\$ million)

*Excluding one-off, non-cash fair value loss on redeemable exchangeable notes

Maiden Interim Dividend Signals Confidence

Food Empire declared its first-ever interim dividend of 3.0 Singapore cents per share, a clear signal of the management’s optimism about the company’s continuing growth momentum and future outlook.

Geographic Performance: Southeast Asia and South Asia Surpass Russia as Growth Engines

Southeast Asia: Fastest-growing region, revenue up 25% to US$78 million, with Vietnam accounting for over 60% of segment sales. Vietnam alone posted a 37% jump on the back of strong demand and a bigger sales force.
South Asia: Revenue up 25% to US$37 million, driven by robust demand for both freeze-dried and spray-dried coffee, with both production plants running at full capacity.
Ukraine, Kazakhstan, and CIS: Revenue up 19% to US$68 million, benefitting from price gains, higher volumes, and a full half-year contribution from Tea House LLP.
Russia: Revenue up 22% to US$83 million.
Combined, Southeast and South Asia now contribute 42% of total revenue—surpassing Russia’s 30%—a testament to FEH’s successful diversification and brand leadership in these markets.

1H25 Revenue & Core PATMI by Geography (US\$ million)

Strategic Expansion: Manufacturing, Partnerships, and Brand Accolades

• India Facility Expansion: FEH will invest US\$37 million to expand its spray-dried soluble coffee manufacturing facility in Andhra Pradesh. The expansion, funded mainly via borrowings, will start in Q4 2025 and finish by end-2027, boosting capacity by ~60% to support the branded consumer business.
• Strategic Partnership: Empire International, an FEH subsidiary, has partnered with Capital A Berhad’s Santan Food Services to co-develop ready-to-drink (RTD) beverages, starting with Vietnamese iced coffee. Products will be launched on AirAsia flights and in regional retail, leveraging Capital A’s vast distribution network to boost brand visibility and enter the high-growth RTD segment.
• Corporate Recognition: FEH continues to receive accolades in 2025—named in the Fortune Southeast Asia 500, recognized as a “Company of Good” by Singapore’s National Volunteer & Philanthropy Centre, and awarded “Champion” in the Leadership for Good category at the Brands for Good Awards 2025.

Earnings Revision: Upgrades on Revenue and Margin Assumptions

Analysts have raised their 2025-2027 revenue forecasts by 4–5% after the 1H25 top-line beat and improved gross margin assumptions by 1–2 percentage points thanks to successful pricing strategies. As a result, 2025–2027 earnings forecasts were revised upwards by 7–13%.

Valuation: Attractive Upside with Discount to Peers

The stock’s target price is raised by 14% to S$2.73, based on 17x 2026F PE (2 standard deviations above FEH’s long-term mean). FEH currently trades at 14.5x 2026F PE, representing a 41% discount to the regional peer average of 24.7x.

Peer Comparison Table

Financial Outlook: Key Forecasts and Metrics

Selected Financials (US\$ million unless stated otherwise)

Conclusion: BUY Recommendation Reiterated on Strong Fundamentals and Discounted Valuation

UOB Kay Hian maintains its BUY recommendation for Food Empire Holdings, raising the target price to S\$2.73. The company’s robust earnings momentum, successful strategic initiatives, and attractive valuation relative to peers make it a compelling investment for those seeking exposure to a high-growth, well-managed consumer staples play in Asia and beyond.