Kawan Food Catalysts 1. Drop in raw material cost - palm oil price has been dropping since Q2 2022 2. Recession-proof industry - poor people will eat more frozen food instead of fresh food to save costs 3. Their Roti Canai seriously tastes delicious 4. Acquisition target of major F&B players like Nestle Malaysia 5. Good MGMT. MR GAN THIAM CHAI is a smart businessman.
Kawan Food is one of the few stocks analysts should go overweight on. Price target upgrade to RM3.50 based on reverse DCF analysis. Dumb sell side analysts trying to predict cash flow will fail. No need to use complex revenue forecasting model I am using a different valuation method. I believe that Kawan Food at RM2.24 still presents the best opportunity from a risk-reward perspective.
Long term, based on bull case, we think that Kawan Food will be the No 1 player in the Malaysian Food & Beverages. Management provided very good guidance for the next few quarters forward. I won't sell Kawan Food yet.
KUALA LUMPUR (April 21): Convenience food manufacturer Kawan Food Bhd is buying five parcels of land measuring 7.08 acres in Shah Alam, Selangor for a total of RM50.46 million, as part of its expansion plans.
Kawan Food said it intends to build a second manufacturing facility for its operations on the proposed site. It plans to expand its cold room facility to include a warehouse and cold chain distribution for in-house and external products, equipped with new technology such as robotic automated warehouse to cater for frozen, chilled and ambient food products.
"This would enable Kawan Food to explore new ideas and growing product diversity for new markets. Also, with the strategic location in Shah Alam, there is potential reduction in logistic cost for deliveries in local market," it said in a bourse filing on Thursday (April 21).
Kawan Food's wholly-owned subsidiary Kawan Food Manufacturing Sdn Bhd (KFMSB) has entered into a sale and purchase agreement with RGP Warehouse Solutions Sdn Bhd to buy three parcels of land totalling 4.07 acres for RM28.94 million or RM163.199 per sq ft. KFMSB is also in the process of acquiring another two parcels of land totalling 3.01 acres from Perbadanan Kemajuan Negeri Selangor (PKNS) for RM21.52 million.
The group said it will finance the land acquisition through internal funds and/or external borrowings.
"The acquisition is in line with Kawan Food's corporate strategy of expanding and growing its operations, and diversification, as well as exploring and developing new segments of the industry, manufacturing a variety of products including plant-based products, etc, in chilled ambience, aside from frozen food. This business strategy will provide an opportunity for Kawan Food to create greater economic value and increase the earnings potential of the group," it added.
Barring any unforeseen circumstances, the land acquisition is expected to be completed by the last quarter of 2022. The acquisition is not expected to have any material effect on the group's gearing for the financial year ending Dec 31, 2022.
Kawan Food Catalysts 1. Drop in raw material cost - palm oil price has been dropping since Q2 2022 2. Recession-proof industry - poor people will eat more frozen food instead of fresh food to save costs 3. Their Roti Canai seriously tastes delicious 4. Acquisition target of major F&B players like Nestle Malaysia
What i like about CP brand is their fried rice variety! I keep few of them in the fridge! So convenient! Especially when my wifey not around and i have little rumble in the tummy, i just pop them in microwave and walla!
Trust me, all the young people who waste their pocket money shopping at Mid Valley Megamall and One Utama will soon be eating frozen Kawan brand roti canai once the recession comes. Young people haven't felt it yet because of crypto mania last year.
Hedge some for inflation data.cpi above 8.3 percent a die.8.3 percent in line will fall 1.8-2.3 percent.below 7.8 percent will rally 2 percents. But core inflation 6.5 percent as target.if both also very bad will fall for fews days in market around the world.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Posted by wallstreetrookie > 2022-08-10 14:31 | Report Abuse
Recession means people will eat fast food (refrigerated/frozen food).
Kawan Food will do well in the next quarter