SINGAPORE (Aug 14): RHB Research is maintaining its “buy” rating on Food Empire with an unchanged target price of 95 cents, after the food and beverage (F&B) product manufacturer on Saturday released a set of 2Q17 results which came in line with the research house’s expectations.
See: Food Empire posts 64% rise in 1H earnings to US$9.5 mil
In a Monday report, analyst Juliana Cai says there has been no changes to RHB’s recommendation, target price and forecasts for now – and that the stock is still a currency play, in the research house’s view.
For now, Cai highlights that Food Empire’s Commonwealth of Independent States (CIS) markets, where Russia saw sales improvements y-o-y but declined q-o-q, were mainly affected by movements in currencies.
Meanwhile, she highlights that sales in Indochina picked up in 2Q but remained lower in the half-year versus 1H16, which was attributed to the difference in timing of the Lunar New Year season in 1Q17 as well as stiffer competition.
“Sales in the other markets were the key bright spot in the quarter’s results – 2Q17 sales grew 62% y-o-y and 17% q-o-q to US$13.7 million. This was mainly due to higher sales contribution from the group’s non-dairy creamer plant in Malaysia, and instant coffee plant in India,” notes Cai.
RHB says it will issue a full report post Food Empire’s analyst briefing on Aug 16.
As at 11.14am, shares in Food Empire are trading 1 cent higher at 68 cents.
