In the most recent 1QFY2026, the company delivered another record quarter, with broad-based revenue growth of 16.9% y-o-y to US$159.7 million.
Cheong and Tang observe that Asia surpassed the company's traditional markets of Russia and Central Asia for the first time at 58% of its revenue, underscoring the payoff of its diversification strategy.
Besides Vietnam, India is an increasingly important market with the share of revenue increasing from 5.4% in 2021 to 12.3% in 2025, the analysts note.
Cheong and Tang point out that robusta coffee, a key ingredient, used to cost US$5.821 per tonne last February. It has since eased to US$3,670 per tonne - not as low as 2022 levels, which marked the recent surge, but seen to help Food Empire enjoy better margins nonetheless.
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"2025 captured some of this relief, and we expect further gradual margin expansion in 2026 as the commodity is sensitive to weather shocks," state Cheong and Tang.
Food Empire's steady returns to shareholders has been noted as well. Between 2021 and 2025, the company has returned a total of $228.5 million to shareholders, comprising $196 million in dividends and the remaining via share buybacks.
The dividend trajectory from 2.2 cents in 2021 to a record of 12 cents in 2025 is a five-year CAGR of 53%, and 2025 marked the first-ever interim dividend.
In another positive development, the company has recently completed a 1-for-5 bonus issue, which Cheong and Tang interpret as a signal of the management’s confidence in earnings sustainability and is designed to improve secondary market liquidity.
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The bonus issue has increased the share base by 20% to 661.7 million shares.
The analysts continue to value the stock at 25x FY2026 earnings, or 2.5 sd above the long-term average, thereby deriving a target price of $3.49.
Food Empire is now trading at just 17x 2026F PE, a 28% discount to the peer average of 24x.
