He notes that the company plans to further enhance operating efficiency by 30% over the next 12 months through more automation. Citing market share gains and revenue growth generated from MacCoffee, the flagship brand, Cheong is confident about Food Empire’s strong execution. He further expects Food Empire in Vietnam to achieve above-industry growth rates via regular new product launches and marketing.
Vietnam is the world’s second-largest coffee producer, thanks to its traditional strong brew gaining global recognition and acceptance. Yet, Food Empire Holdings, which is a market leader selling three-in-one instant coffee in Russia and other former Soviet states, is steadily replicating this in Vietnam as well, prompting various analysts who came back from a two-day visit with raised target prices, potentially sending the share price that is already up some 160% year to date whiffing further
John Cheong of UOB Kay Hian is the most bullish thus far, with a revised target price of $3 from $2.73. “Compared with two years ago, we observed notable improvements in operating efficiency and capacity. Staff strength has more than quadrupled from 500 to 2,300 employees, reflecting higher demand and scale,” writes Cheong in his Sept 17 note.
