RHB maintains 'buy' rating for Food Empire with a higher TP on bullish FY2021 outlook

RHB Group Research analyst Jarick Seet has maintained his “buy” rating on Food Empire with a higher target price of $1.27 from 80 cents previously.

The revised target price comes following Food Empire’s stronger performance for the 4QFY2020 ended December. Despite y-o-y revenues decreasing due to Covid-19 impacting sales, Food Empire was able to sequentially improve from 2QFY2020 onwards and reported record FY2020 results.

The company’s FY2020 earnings increased by 2.9% to US$26.5 million ($35.2 million) due to better margins, which management attributes to solving the operational and logistical issues caused by the pandemic and lower marketing and administrative costs. Food Empire declared record dividends of 2.2 cents per ordinary share for the period.