Yeo Hiap Seng stays focus on expansion, rejuvenation of F&B business

Yeo Hiap Seng stays focus on expansion, rejuvenation of F&B business

By: 
PC Lee
24/09/18, 11:57 am

SINGAPORE (Sept 24): Founded in 1900, Yeo Hiap Seng has grown from a soy sauce manufacturer to the Asia food and beverage (F&B) player it is today.

YHS is well known for its brand of Asian beverages like soybean drink and chrysanthemum tea and canned food products including chicken curry and sardines and baked beans.

YHS also exports to the US and Europe. In 2003, YHS unveiled a new range of “Y-Generation” drinks with creative flavours, packaging and logo to target younger consumers.

Since FY14, YHS has focused on expanding and rejuvenating its core consumer F&B business.

In FY17, company sold its investment in delisted Super Group. In March, YHS entered into a joint venture with HK-listed China Huiyuan Juice Group to develop, manufacture, sell and distribute fruit and vegetable juices targeting the Malaysian market.

In 1H18, YHS’s revenue rose 8.8% y-o-y, while net profit increased 42.3% y-o-y boosted by a $2.9 million gain from the sale of property, plant and equipment and $3.6 million in fair value gains on financial assets.

Although YHS enjoyed y-o-y higher sales in Malaysia, Singapore, Cambodia and China, gross margin was flattish y-o-y at 32.5%. No interim dividend was declared.

In a recent unrated report, CGS-CIMB Securities’ analyst William Tng says for the next 12 months, YHS expects F&B profit margins to remain under pressure from the weak consumption outlook for the markets that the group operates in.

And although the company expects its selling prices to stay competitive, Tng says likely fluctuations in raw material prices and foreign exchange rates could have negative impact on the group’s earnings in the near future.

Still. YHS plans to continue investing in rejuvenating its brand and launch new products, develop its agency business and improve operating efficiencies, says Tng.

YHS trades at a 3.7 times FY17 earnings, 0.86 times book value against 23.4% ROE.

In the past five years, YHS has been in a net cash position. At end June, YHS had net cash of $278 million or 49% of its market cap as at Sept 20.

Although it does not have an official dividend policy, YHS has paid dividends in the past five years.

Year to date, shares in YHS are down 18.7% to $1.00.

Winners and losers from Singapore's budget as election looms

SINGAPORE (Feb 19): Singapore Finance Minister Heng Swee Keat boosted health-care and military spending, gave tax rebates to citizens and tightened rules on foreign workers ahead of an election that could come as early as this year. Heng announced a new $8 billion support package for seniors in his budget speech on Monday, as well as measures to help local businesses adopt new technologies. The expansionary fiscal plan will push the overall budget deficit to 0.7% of gross domestic product in the year ending March 2020, from a revised surplus of 0.4% this year. The finance minister opened....
Read More >>

Sasseur REIT FY18 DPU exceeds IPO forecast by 12.6%

SINGAPORE (Feb 18): The manager of Sasseur REIT announced a 4Q18 DPU of 1.999 cents, 28.1% higher than forecast. This also brings 2H18 DPU to 3.541 cents and FY18 DPU to a total of 5.128 cents. Sasseur REIT offers investors the unique opportunity to invest in the fast-growing retail outlet mall sector in China through its initial portfolio of four quality retail outlet mall assets. 4Q18 distributable income came in at $23.6 million, 28.1% higher than forecast while EMA rental income came in 1.6% higher than forecast at $31.2 million. Based on the Feb 18 closing unit price of $0.71,....
Read More >>

DBS chief sounds cautious note, but expects modest growth this year

SINGAPORE (Feb 18): Looking to the future, DBS CEO Piyush Gupta sounded a cautious note. For one, mortgage bookings have fallen by 30% to 40% since additional cooling measures were announced in July last year, he said. However, loan growth should continue and is likely to come from the corporate sector. See also: DBS reports 8% rise in 4Q earnings to $1.32 bil; brings FY18 earnings to new record high “We guided for mid-single digit loan growth and we are keeping to this loan growth estimate. I anticipate we will still see choppy markets and macro-economic slowdown,” Gupta says. Among....
Read More >>