UOB Kay Hian analyst John Cheong has lifted Food Empire’s target price to $4.21 from $3 after the company reported a stronger-than-expected set of results for its FY2025.
For the 12 months ended Dec 31, 2025, the company reported patmi of US$36 million ($45.5 million), due to a one-off, non-cash fair value loss of US$32.6 million on its redeemable exchangeable notes (REN).
Excluding the fair value loss, Food Empire’s core patmi of US$69 million beat Cheong’s full-year forecast of 15%. This was driven by a 21% y-o-y growth and higher gross margins across most of the company’s core segments.
In FY2025, Food Empire’s revenue rose by 21.1% y-o-y to a new high — the company’s fifth straight record — of US$576.9 million. The revenue growth was led by Russia, Food Empire’s largest market, which rose by 34.8% y-o-y to US$191 million. Central Asia record the second-fastest growth at 25.6% y-o-y to US$102 million. The region was led by Kazakhstan from higher volumes, price gains, improved product availability and the full-year consolidation of Teahouse LLP. South Asia and Southeast Asia grew by 15.7% and 14.3% to US$71 million and US$147.8 million.
Maintaining his “buy” call, Cheong also cheered Food Empire’s strong dividends. Food Empire declared a final dividend of 5 cents per share and a special dividend of 4 cents per share, bringing its total FY2025 dividend to 12 cents per share.
The company’s ongoing share buybacks have also indicated its confidence in its growth. “Food Empire resumed its share buybacks in 4Q2025, repurchasing a total of 2.68 million shares,” says Cheong.
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“While the company does not have a formal buyback mandate, this move underscores management’s confidence in the company’s long-term prospects and commitment to enhancing shareholder value, while also providing a positive signal to the market. Looking ahead, these share buyback efforts are likely to continue supporting share price upside in the near term,” he adds.
Other factors that Cheong is bullish about: the company’s capacity expansion, which includes its coffee-mix plant in Kazakhstan and snack factory in Malaysia, both completed in 2025. Production will commence in 1Q2026 and 2Q2026 respectively and ramp-up over the next two to three years. The company also plans to complete a spray-dried soluble coffee facility in South India by 2027 and a new freeze-dried plant in Vietnam by 2028.
Coffee prices, which have been on a downtrend since the end of 2025, should also help relieve raw material cost pressures, and likely to support margin expansion in 1HFY2026, notes Cheong.
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The analyst’s new target price is based on an FY2026 P/E multiple of 26 times from 19 times previously. “While this implies a 2.5 standard deviation (s.d.) above the longterm average, we believe the strong growth outlook justifies a sustained premium, albeit at a 7% discount to regional peers’ average of 27 times,” he says.
Cheong has also increased his FY2026/FY2027 core patmi and revenue forecasts by 11%/13% and 5%/6% respectively after Food Empire’s FY2025 results.
“Capacity expansion should continue to drive top-line growth, while improving sales mix and operational efficiencies are expected to support margins going forward,” he adds.
Shares in Food Empire closed 6 cents lower or 1.84% down at $3.21 on Feb 26.
