UOB Kay Hian Private Limited
Date of Report: Wednesday, 17 September 2025
Food Empire Holdings Shines in Vietnam: Target Price Raised 10% Amid Surging Growth and Market Share
Introduction: A Stellar Update for Food Empire Holdings
Food Empire Holdings (FEH SP) has delivered a robust operational update, with a recent site visit in Vietnam reinforcing the company’s strong execution, rapid market share gains, and a compelling growth trajectory. UOB Kay Hian has maintained its BUY rating, raising the target price by 10% to S\$3.00, reflecting rising confidence in FEH’s management and market position.
Vietnam Operations: Operational Excellence and Scale-Up
A comprehensive site visit to FEH’s Vietnam operations in September 2025 showcased dramatic improvements compared to two years prior. Key highlights include:
- Staff strength has surged from 500 to 2,300, underlining demand and scale expansion.
- Significant enhancements in operating efficiency and capacity, with plans to further boost efficiency by 30% in the coming 12 months through increased automation.
Market Share and Revenue Growth: Outpacing the Industry
FEH’s flagship brand, MacCoffee, has increased its Vietnam market share by 2 percentage points year-on-year, reaching 15% in 2024. Revenue from Vietnam soared over 30% year-on-year to US\$76 million—more than three times the industry growth rate. This exceptional performance is attributed to:
- Localized product development tailored to Vietnamese consumer tastes.
- Strategic marketing, especially in traditional retail channels, where most Vietnamese consumers shop.
- Successful new product launches, such as ready-to-drink (RTD) Café PHO iced milk coffee and instant bubble tea, the latter gaining momentum in its niche.
Growth Prospects: Product Innovation and Market Penetration
FEH Vietnam is on track for another record year in 2025, with revenue expected to exceed US\$100 million—a greater than 30% increase from 2024. The growth outlook is supported by:
- Two new RTD product launches scheduled for 2026.
- Ongoing innovation across instant beverages.
- Deepening engagement with traditional retail channels.
The RTD beverage market in Vietnam (~US\$5 billion) is approximately ten times the size of the instant beverage segment (~US\$500 million), providing FEH with ample headroom for above-industry growth.
Key Financials: Performance Snapshot and Forecasts
Below is a summary of core financial metrics for FEH from 2023 to 2027, highlighting the company’s sustained growth and strong financial position:
| Year (US\$m) |
2023 |
2024 |
2025F |
2026F |
2027F |
| Net Turnover |
426 |
476 |
529 |
560 |
592 |
| EBITDA |
79 |
72 |
80 |
89 |
95 |
| Operating Profit |
71 |
63 |
70 |
79 |
85 |
| Net Profit (Adj.) |
57 |
50 |
58 |
65 |
70 |
| EPS (US cents) |
10.8 |
9.4 |
11.0 |
12.3 |
13.3 |
| PE |
18.8 |
21.5 |
18.4 |
16.4 |
15.2 |
| P/B |
3.6 |
3.6 |
3.6 |
3.3 |
2.9 |
| EV/EBITDA |
12.5 |
13.7 |
12.4 |
11.2 |
10.5 |
| Dividend Yield (%) |
3.9 |
3.1 |
3.1 |
3.1 |
3.1 |
| Net Margin (%) |
13.3 |
11.0 |
6.1 |
11.6 |
11.9 |
| Net Debt/(Cash) to Equity (%) |
-32.1 |
-31.1 |
-28.5 |
-34.0 |
-39.5 |
| ROE (%) |
19.7 |
17.8 |
10.9 |
21.0 |
20.4 |
Valuation: Attractive Discount to Peers, Higher Target Price
UOB Kay Hian has increased its PE-based target price for FEH to S\$3.00 (from S\$2.73), using a higher 18.7x 2026F PE, which is 1.5 standard deviations above FEH’s long-term mean. Despite the upgrade, FEH still trades at a 34% discount to regional peer averages of 24.8x 2026F PE. This underscores FEH’s relative undervaluation and upside potential.
Peer Comparison: Regional Beverage and FMCG Players
Below is a comparison of FEH against notable regional peers:
| Company |
Ticker |
Price (lcy) |
Market Cap (US\$m) |
PE 2025F |
PE 2026F |
P/B 2025F |
P/B 2026F |
ROE 2025F (%) |
Yield 2025F (%) |
| Ccl Products |
CCLP IN |
920.8 |
1,396 |
34.3 |
25.9 |
5.5 |
4.7 |
16.9 |
0.7 |
| Dydo Group |
2590 JP |
2582 |
582 |
45.3 |
34.0 |
0.9 |
0.9 |
2.4 |
1.2 |
| Mayora Indah |
MYOR IJ |
2070 |
2,815 |
15.6 |
12.9 |
2.5 |
2.2 |
16.5 |
2.7 |
| Nestle (Malaysia) |
NESZ MK |
97.9 |
5,459 |
45.5 |
41.4 |
38.1 |
37.5 |
87.0 |
2.1 |
| Carabao |
CBG TB |
56.5 |
1,782 |
18.0 |
16.7 |
3.8 |
3.4 |
22.1 |
2.5 |
| Fevertree Drinks |
FEVR LN |
893 |
1,431 |
38.2 |
31.4 |
4.4 |
4.2 |
12.6 |
1.9 |
| Ito En |
2593 JP |
3518 |
2,040 |
24.4 |
23.3 |
1.9 |
1.5 |
10.1 |
1.4 |
| National Beverage |
FIZZ US |
38.62 |
3,616 |
18.9 |
18.3 |
5.6 |
4.3 |
35.3 |
n.a. |
| Vita Coco Co |
COCO US |
39.79 |
2,261 |
34.4 |
29.5 |
7.0 |
5.5 |
23.9 |
n.a. |
| Vitasoy |
345 HK |
8.73 |
1,178 |
31.5 |
25.7 |
2.9 |
2.7 |
11.0 |
2.1 |
| Uni-President |
220 HK |
8.63 |
4,791 |
15.2 |
13.9 |
2.5 |
2.4 |
16.7 |
6.6 |
| Food Empire Holdings |
FEH SP |
2.59 |
1,073 |
18.4 |
16.4 |
3.6 |
3.3 |
19.1 |
3.1 |
Balance Sheet and Cash Flow Analysis
FEH maintains a healthy balance sheet, with net cash positions and prudent capital allocation. Notable figures include:
- Net cash to equity remains strong, improving from -32.1% in 2023 to -39.5% by 2027F.
- Consistent capital expenditure focused on automation and growth initiatives.
- Dividend payout stable at around 3% yield.
Shareholder Structure and Stock Data
Key figures on FEH’s market profile:
- Shares issued: 539.8 million
- Market cap: S\$1,372.1 million (US\$1,073.4 million)
- Major shareholders: Anthoni Salim (24.6%), Tan Wang Cheow (22.5%)
- 52-week high/low: S\$2.66 / S\$0.96
- Outstanding price performance: 167.0% 1-year gain; 161.6% YTD
Valuation, Risks, and Catalysts
- Valuation remains compelling, with FEH trading at 16.4x 2026F PE versus peer average of 24.8x.
- Earnings forecasts are maintained, and upside catalysts include earnings-accretive acquisitions, stronger-than-expected earnings, and higher dividends.
Company Overview: Food Empire Holdings
Food Empire Holdings manufactures and markets instant beverages, frozen foods, confectioneries, and snacks, with exports to Russia, Eastern Europe, Central Asia, the Middle East, and Indochina.
Conclusion: BUY Maintained with Higher Confidence
With operational excellence, accelerating Vietnam growth, strong cash generation, and multiple product innovation drivers, FEH is well-positioned for above-industry returns. UOB Kay Hian’s upgraded target price of S\$3.00 reflects this optimism, making FEH a compelling investment in the consumer staples sector. Investors seeking growth at a discount to regional peers should take note of FEH’s momentum and execution capabilities.
Disclosures and Analyst Contacts
Analysts: John Cheong ([email protected], +65 6590 6623), Heidi Mo ([email protected], +65 6590 6630) Broker: UOB Kay Hian Private Limited Date: 17 September 2025
