UOBKayhian on 14 May 2015
FY15F PE (x): 24.5
FY16F PE (x): 21.9
Below expectations. Adjusted 1Q15 net profit of S$13.0m declined 25% yoy and came
in below our and market expectations. Turnover fell 2% yoy on lower branded consumer
(BC) sales (-5% yoy), which offset the 4% yoy rise in food ingredient (FI) sales. Whilst
there were some bright spots in selective BC markets such as Thailand and Myanmar,
we disappointed by the performance of markets such as the Philippines and Malaysia,
with the former impacted by the de-listing of non-performing SKUs. Maintain HOLD with
a lower target price. The share price has retraced 17% since our downgrade on 27
March but we are inclined to maintain our HOLD rating owing to a mixed outlook,
particularly for BC. We have a lower PE-based target price of S$1.25 (previously
S$1.43), which is based on its 2016F regional peers valuation. The reduction is mainly
on account of the earnings cut following 1Q15 results.
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