Background

Farm Price Holdings Berhad (Farm Price) is a Johor based company principally involved in the wholesale and retail of fresh vegetables, as well as food and beverage (F&B) products and other groceries.

IPO Statistic

The IPO entails a public issue of 102.0mn new shares and an offer for sale of 33.0mn existing shares. The share offers account for 30.0% of the group’s enlarged issued share capital.

Competitive Advantages

1. Offering a variety of products with accreditation;

2. Comprehensive in-house infrastructure in place; and

3. Vast array of suppliers and a strong customer base.

Valuation

Most of the Farm Price’s peers in Malaysia are privately owned. Therefore, we ascribe a target P/E of 12x to its FY24F EPS, resulting in a fair value of RM0.25/share due to its smaller market cap compared to its peers in China. We view the P/E multiple as fair and reasonable, considering its double-digit gross profit margin and potential growth in Singapore’s vegetable wholesale segment. Not Rated.

Source: TA Research - 29 Apr 2024