Food Empire Holdings is set to achieve a 22% increase in its target share price to S$2.40, according to a report by UOB Kay Hian. The company, known for its instant beverage products, is expected to deliver core earnings of $27m (US$27m) in the first half of 2025, marking a 14% year-on-year growth. This optimism is driven by the company’s strong brand equity and strategic expansions in emerging markets.
Food Empire Holdings is expanding its manufacturing capabilities with four new facilities in Malaysia, Kazakhstan, Vietnam, and India, expected to be operational by 2028. These expansions are aimed at capitalising on the growing demand for instant coffee, particularly in high-growth markets like Russia and Kazakhstan, where the company already holds significant market shares. The company is also set to benefit from favourable market conditions, including falling coffee prices and a strengthening Russian Rouble.
A key development is the supplemental agreement for its $40m (US$40m) redeemable equity note, which will eliminate earnings volatility from the third quarter of 2025. Despite a one-off fair value loss of around $20m (US$20m) in the first half of 2025, the company views this as a non-recurring event, presenting a potential buying opportunity for investors.
UOB Kay Hian maintains a “Buy” recommendation for Food Empire Holdings, citing its robust financial performance and strategic market positioning. The company’s focus on brand building and market leadership in Asia is expected to drive continued growth, with a projected net profit of $54m (US$54m) for 2025.
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