As a result, given his unchanged valuation basis of 3 s.d. above Food Empire’s 10-year average P/E, Tng’s new target price is pased on a multiple of 20.5 times from 17 times.
“Our target 20.5 times P/E places Food Empire at a 7.7% discount to its international coffee peers’ 22.2 times 2026 sector average P/E,” says Tng. It also represents a larget 20.8% discount to the international beverage peers’ 2026 sector average P/E of 25.9 times.
Higher net profits expected for FY2025
Food Empire, which is expected to release its FY2025 results in the week of Feb 23, is likely to see a core net profit of US$68.9 million ($87.5 million) for the FY2025 ended Dec 31, 2025. This is based on strong revenue performance in Russia, a key market for the company, and a stronger Russian ruble against the US dollar (USD), Food Empire’s reporting currency. The figure excludes the revaluation loss reported in the 1HFY2025.
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“As the Russian ruble appreciated slightly against the US dollar (USD) in 4QFY2025 (79.8 versus 80.6 in 3QFY2025), we believe the company likely further increased its sales efforts in Russia in 4QFY2025,” says Tng.
In addition to the higher net profit, Tng has lifted his gross margin assumption for FY2025 by 0.5 percentage points to 30.5%.
Additional re-rating catalysts, in his view, include a bonus issue and higher dividends for the 2HFY2026.
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The analyst has maintained his “add” recommendation on the stock.
As at 4.18pm, shares in Food Empire are trading 20 cents higher or 6.62% up at $3.22. The stock is up 31.4% year to date and has surged 222% over the past 12 months.
