SINGAPORE (Nov 24): OCBC Investment Research is keeping a “buy” call on food company with a target price of $1.27.

OCBC likes the stock on the back of bright earnings outlook for its bakery and pork production businesses, which contributed about 49% and 38%, respectively, to sales in fiscal 2014.

Its bakery brands, Gardenia and Bonjour, command about 60% market share in Singapore.

Under Rivalea, they are also the largest fully integrated producer of pork in Australia, it notes.

“New value-added products, higher average selling prices for products, strong branding, and production capacity expansion continue to support growth ahead,” OCBC says.

Meanwhile, the pressure on margins can be alleviated with productivity initiatives and continued focus on the sale of fresh meat cuts, OCBC says.

The stock was trading up 2.4% at $1.08 while the benchmark index is trading up 1.03%.