Food Empire Holdings Limited

Food related stock counters have been the new darlings of the Singapore Stock Exchange due to the F&N saga. Food Empire is one of the food related stock counters that have been in the news limelight in recent months.

It is currently trading at S$0.60, with PE ratio at 17.5 and NAV of S$0.364.

The reasons I find this counter attractive is different from those of Global Premium Hotels, which I believe is trading at an attractive price and a substantial discount to its NAV.

Food Empire is a food and beverage company, which manufactures and sells instant beverage products (e.g. instant coffee beverages), frozen convenience food (e.g. tail-on shrimp dumplings, butterfly seafood wantons), and snack food (e.g. potato crisps). Its main markets are in Russia, followed by Eastern Europe and Central Asia. 

12 December 2012: OSK-DMG says Food Empire is the cheapest Singapore-listed 3-in-1 beverage player at 14X P/E vs Super (S10.SG) at 21X and Viz Branz (L5J.SG) at 15X. 

More importantly, Food Empire is setting its eyes on the Chinese and India market which, historically, have always been tea drinkers. However, in recent years, there has been an increase in coffee drinkers in these big markets. So much so that Starbucks has also jumped on the bandwagon and set up operations in these countries.   

Starbucks established cafes in the region have maintained double-digit sales growth over the past couple of months (report in Wall Street Journal on 6 December 2012)

Starbucks opened its first cafe in India in October 2012 (report in Wall Street Journal in October 2012)

Food Empire has incorporated subsidiaries in China and India to bring its products into China and to manufacture instant coffee in India.

I am really excited by these news, and believe that there is tremendous growth opportunities for this company. And, of course I am vested :)

If you are reading this, you may be interested in:-

• Food Empire Holdings post 11.3% rise in net profit in Q1 FY 2013

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