FOOD EMPIRE

Food Empire, still much cheaper on PE valuation compared to Super Group~

Food Empire, still much cheaper on PE valuation compared to Super Group~

1. Profit after tax

Food Empire jumped from US$14.8 million to US$20.2 million – an increase of 36.6%.

Super Group : Net profit increased 29% YoY to S$82.6m.

2. Earnings per share

Food Empire : 3.87 USD cents = 4.7 sgd cents.

Super Group: 14.18 cents.

3. PE ratio

Food Empire: 68 divided by 4.7 = 14X

Super: 378 divided by 14.18 = 27X

Just saw that Super has cheonged ttoday. Food Empire still quiet. Waiting to rev uP?

What a joke! DBS Vickers is valuing Super Group at 26X PE.

www.remisiers.org/cms_images/research/Fe...bsv_280213__buy_.pdf

And we all can see that Food Empire (67 cents) is trading at just 14X PE historical. Food Empire lacks coverage by the brokers -- which is the real reason the stock valuation is still cheap. Tis is a buying opportunity for value investors. Food Empire will re-rate sooner or later with a 80% upside potential.

RHB Research: www.remisiers.org/cms_images/research/Ma...Matters_5_Mar_13.pdf

Food Empire reported 4Q12 net profit of USD21m (+37% y-o-y), exceeding our estimate of USD18m. This is attributed to higher than expected gross margins which expanded by 3ppt y-o-y to 46.8%. A dividend of 1.2SGD¢ was declared, translating into a yield of 1.8%.

We raise our 2013-14 earnings by 18% in light of stronger growth momentum in Russia as well as higher gross margins. We rollover our valuations to derive a higher TP of SGD0.84, pegged to 15x 2014 EPS. Maintain BUY.