SINGAPORE (Jan 22): Global Agriculture, Food and Beverage (F&B) stocks saw marginal declines in 2019, with a 1% median decline in total return. Almost half of the Global Agriculture, F&B stocks are listed across Asia Pacific exchanges, with the significant regional proportion also generating a 1% median decline in total return.
Conversely, in Singapore, the relevant contingent of close to 40 Agriculture, F&B stocks generated a 3% median total return in 2019. These stocks are also trading at a highly competitive 22 times median price-to-earnings ratio, similar to the 19 times median price-to-earnings ratio for the close to 1,800 relevant stocks across Asia Pacific, according to a market update published by Singapore Exchange.
Among the 40 relevant stocks in Singapore, the top 10 most traded maintained a median price-to-earnings ratio of 23 times and generated a median total return of 17% in 2019. The ten stock are Wilmar International, Thai Beverage (ThaiBev), SATS, Golden Agri-Resources, Dairy Farm, First Resources, Sheng Siong, Japfa, Olam International and Koufu. Out of all these stocks, seven saw positive returns in 2019, with ThaiBev leading the group, recording 49% in total return.
On Nov 21, 2019, the Ministry of Trade (MOT) announced that growth in Singapore’s accommodation and food services sector grew q-o-q and y-o-y in 3Q19. The food services growth was mainly due to higher sales volumes at fast food outlets, restaurants and other eating places.
Meanwhile, four of the 10 most traded Agriculture, F&B stocks that reported at least four-fifths of their revenue to Singapore in their last financial year, all generated gains in 2019 with a median total return of 23% and average return of 22%, underpinning the consistency of their returns in 2019. All four stocks were recipient to net institutional inflow for the year, which totalled $88.2 million.
Of the four stocks, Koufu recorded the strongest returns in 2019 and achieved 25% y-o-y growth in 9M19 net profit after tax. Among the 10 stocks, Koufu was also the third strongest performer, after ThaiBev and Wilmar. Proportionate to market capitalisation as of the end of 2019, Koufu saw the highest net institutional inflow of all 10 stocks in 2019, at 4.7%.
Analysts are also keeping a positive stance on Koufu, as SAC Capital, DBS Group Research and UOB Kay Hian have "buy" calls on the stock.
