Company Coverage
Food Empire Holdings (FEH SP): 1H26: Solid Growth In Key Markets; Surprise Dividend Hike Of 60% yoy
BUY (Maintained)
Current price:
Target price:
Upside:
S$2.51
S$3.49
+39.0%
Analyst
Analyst
Highlights
FEH delivered another record 1H26 revenue of US$315.1m (+15% yoy), while net profit grew to US$35.3m (+12% yoy). Results are in line.
FEH delivered growth across all key markets, led by Central Asia (+33.9%) and Russia (+24.6%), driven by higher volumes across FEH’s key markets.
There was a positive surprise from a 60% yoy increase in interim dividend after adjusting for bonus issue. Maintain BUY with an unchanged target price of S$3.49.
Analysis
Top-line reaches all-time high. Food Empire Holdings’ (FEH) 1H26 revenue of US$315.1m (+15.0% yoy) formed 52% of our full-year forecasts, ahead of our expectations. This represents another record half-year performance, following five consecutive years of record revenue from 2021 25. Net profit also grew 12.2% to US$35.3m, in tandem with the strong top line growth, and remains in line with our forecasts at 49%.
Growth across all markets. Russia surged 24.6% yoy, aided by increased sales volume and a 12.3% ruble appreciation; Southeast Asia grew 2.4%, anchored by Vietnam; Central Asia delivered the strongest growth of 33.9% yoy, fuelled by solid sales volume expansion; South Asia also recorded revenue growth of 4.4% yoy, driven by stronger demand in 1H26; Europe grew by 5.5% yoy largely due to higher sales volumes and price gains in its Ukraine market. This broad-based growth across all of FEH’s key markets continues to underpin FEH’s branding and presence in the markets it operates in.
Stronger interim dividend declared. FEH declared an interim dividend of 4.0 S cents in 1H26 (1H25: 3.0 S cents). Taking into account the recent 1 for-5 bonus issue, this represents a growth of around 60% yoy. This is supported by a healthy balance sheet position with a cash position of US$151.3m as at end-June. The higher interim dividend also comes after FEH paid a record dividend in 2025. This represents a payout of around 57%, and implies a 2026 yield of around 4.8%.
New Kazakhstan facility to support Central Asia growth. The group’s new coffee-mix manufacturing facility in Khorgos, Kazakhstan, commenced operations earlier this year and is expected to contribute positively from 2H26. Strategically located to serve the Central Asian market, the facility strengthens the group’s regional manufacturing footprint. The Malaysia snack factory expansion, completed in 1H26 and increasing snack output by 50%, should also support FEH’s 2H26 results.
Strong expansion pipeline to support growth. The group is progressing with two key capacity additions: a) a spray-dried soluble coffee expansion in India by end-27 (+60% capacity), and b) a new freeze-dried facility in Vietnam by 2028. These will bring FEH’s network to 10 facilities, supporting branded volume growth and B2B sales. With India plants already at full utilisation, the expansion is demand-backed, while the US$80m Vietnam facility will be FEH’s largest-ever investment and establish it as a regional freeze-dried coffee supplier.
Margin tailwinds from retreating coffee prices. Robusta coffee, FEH’s primary input, peaked at US$5,821/tonne in Feb 25, nearly tripling from 2022 levels. The cycle has since turned with Robusta now trading at US$3,780/tonne (-35% from peak). Global coffee production is forecast to hit a record 178.8m bags in 2025/26, supported by recovering supply from Vietnam. We expect lower coffee costs to support margins across FEH’s coffee portfolio, while providing some cushion against input-cost pressures across its broader food and beverage businesses.
Highlights
FEH delivered another record 1H26 revenue of US$315.1m (+15% yoy), while net profit grew to US$35.3m (+12% yoy). Results are in line.
FEH delivered growth across all key markets, led by Central Asia (+33.9%) and Russia (+24.6%), driven by higher volumes across FEH’s key markets.
There was a positive surprise from a 60% yoy increase in interim dividend after adjusting for bonus issue. Maintain BUY with an unchanged target price of S$3.49.
Analysis
Top-line reaches all-time high. Food Empire Holdings’ (FEH) 1H26 revenue of US$315.1m (+15.0% yoy) formed 52% of our full-year forecasts, ahead of our expectations. This represents another record half-year performance, following five consecutive years of record revenue from 2021 25. Net profit also grew 12.2% to US$35.3m, in tandem with the strong top line growth, and remains in line with our forecasts at 49%.
Growth across all markets. Russia surged 24.6% yoy, aided by increased sales volume and a 12.3% ruble appreciation; Southeast Asia grew 2.4%, anchored by Vietnam; Central Asia delivered the strongest growth of 33.9% yoy, fuelled by solid sales volume expansion; South Asia also recorded revenue growth of 4.4% yoy, driven by stronger demand in 1H26; Europe grew by 5.5% yoy largely due to higher sales volumes and price gains in its Ukraine market. This broad-based growth across all of FEH’s key markets continues to underpin FEH’s branding and presence in the markets it operates in.
Stronger interim dividend declared. FEH declared an interim dividend of 4.0 S cents in 1H26 (1H25: 3.0 S cents). Taking into account the recent 1 for-5 bonus issue, this represents a growth of around 60% yoy. This is supported by a healthy balance sheet position with a cash position of US$151.3m as at end-June. The higher interim dividend also comes after FEH paid a record dividend in 2025. This represents a payout of around 57%, and implies a 2026 yield of around 4.8%.
New Kazakhstan facility to support Central Asia growth. The group’s new coffee-mix manufacturing facility in Khorgos, Kazakhstan, commenced operations earlier this year and is expected to contribute positively from 2H26. Strategically located to serve the Central Asian market, the facility strengthens the group’s regional manufacturing footprint. The Malaysia snack factory expansion, completed in 1H26 and increasing snack output by 50%, should also support FEH’s 2H26 results.
Strong expansion pipeline to support growth. The group is progressing with two key capacity additions: a) a spray-dried soluble coffee expansion in India by end-27 (+60% capacity), and b) a new freeze-dried facility in Vietnam by 2028. These will bring FEH’s network to 10 facilities, supporting branded volume growth and B2B sales. With India plants already at full utilisation, the expansion is demand-backed, while the US$80m Vietnam facility will be FEH’s largest-ever investment and establish it as a regional freeze-dried coffee supplier.
Margin tailwinds from retreating coffee prices. Robusta coffee, FEH’s primary input, peaked at US$5,821/tonne in Feb 25, nearly tripling from 2022 levels. The cycle has since turned with Robusta now trading at US$3,780/tonne (-35% from peak). Global coffee production is forecast to hit a record 178.8m bags in 2025/26, supported by recovering supply from Vietnam. We expect lower coffee costs to support margins across FEH’s coffee portfolio, while providing some cushion against input-cost pressures across its broader food and beverage businesses.
BUY (Maintained)
Current price:
Target price:
Upside:
S$2.51
S$3.49
+39.0%
Analyst
Analyst
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