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F&B Plays that Have Outperformed the Region in 2016 YTD

By Geoff Howie

F&B Plays that Have Outperformed the Region in 2016 YTD

  • Singapore lists 17 manufacturers and distributors of food and beverages with a market capitalisation greater than S$200 million. This includes three STI stocks - Wilmar International, Thai Beverage Public Company and Golden Agri-Resources.
  • Together these 17 stocks have averaged a marginal positive return of 0.3% in the 2016 year thus far, compared to an average decline of 8.6% for the region’s 570 manufacturers and distributors of food and beverages.
  • As of Monday’s close, the 17 stocks were trading at an average price-to-earnings ratio of 31.2 and price-to-book ratio of 1.5. This is a higher P/E and lower P/B than the median ratio for the relevant stocks of the region. The 17 stocks average a dividend yield of 3.1%.

Stocks in the Consumer Sector are made up of business that serve consumers with essential goods and services and non-essential goods and services. The essential side is commonly referred to as Consumer Staples and the non-essential side is referred to as Consumer Discretionary.

According to the Global Industry Classification Standard (GICS®), the Consumer Staples Sector comprises companies whose businesses are less sensitive to economic cycles. These businesses include manufacturers and distributors of food, beverages and tobacco and producers of non-durable household goods and personal products. It also includes food & drug retailing companies as well as hypermarkets and consumer super centres.

For the manufacturers and distributors of food, beverages and tobacco segment – there are no tobacco stocks currently listed on Singapore Exchange (SGX) and 17 manufacturers and distributors of food and beverages with a market capitalisation greater than S$200 million. This includes three Straits Times Index (STI) stocks - Wilmar International, Thai Beverage Public Company and Golden Agri-Resources. Together the 17 stocks have averaged a marginal positive return of 0.3% in the 2016 year thus far.

The 17 stocks maintain an average dividend yield of 3.1%. As of Monday’s close, the 17 stocks were trading at an average price-to-earnings ratio (P/E) of 31.2 and price-to-book ratio (P/B) of 1.5. This is a higher P/E and lower P/B than the median ratio for the relevant stocks of the region. There are approximately 570 manufacturers and distributors of food and beverages in the region with a market capitalisation above S$200 million. These 570 stocks currently maintain a median P/E of 24.6 with a median P/B of 2.3.

Please note median measures are used when a large number of stocks are aggregated due to skew effects that can occur with simple averaging. The year to date average (& median) total return of the region’s 570 manufacturers and distributors of food and beverages is a decline of 8.6%. This compares to the relevant 17 stocks in Singapore which averaged the aforementioned marginal return of 0.3% over the period.

Of the 17 largest stocks categorised to the Food, Beverage & Tobacco sector, the five best performers in the year thus far were Sino Grandness Food Industry Group, GMG Global, Petra Foods , Golden Agri-Resources and Bumitama Agri with year to date total returns ranging from 20.5% to  8.5%. Please note while GMG Global is categorised to the food, beverages and tobacco industry it is an investment holding company that plants, cultivates, taps, processes, markets, and exports natural rubber.

Pre-open today Bumitama Agri reported its Fourth Quarter and Full Year 2015 results – FY15 revenue dropped by 3.7% YoY to IDR 5,542 billion while gross profit dropped by 22.5% YoY to IDR 1,816 billion. Production FFB total volumes increased 22.1% YoY to 3,250,224. The Fourth Quarter & Full Year 2015 Presentation (click here) noted that the average sales price of Crude Palm Oil (CPO) was down 16.7% over FY15. Since the end of 2015, Malaysia CPO futures prices have closed on average 11.8% higher than the average closing prices for 2015.

The table below details the 17 manufacturers and distributors of food and beverages with a market capitalisation above S$200 million. Click on each stock to visit its profile page on SGX StockFacts.

Name SGX Code Market Cap in S$M Total Return YTD % Total Return 1 Yr % Dvd Ind Yld % Largest Reported Revenue
Wilmar International F34 19,971 7.5 -1.5 2.4 China
Thai Beverage Public Company Y92 17,326 0.0 0.4 3.5 Thailand
Golden Agri-Resources E5H 4,776 10.3 -11.4 0.5 China
First Resources EB5 3,155 3.6 7.2 1.8 Singapore
Fraser and Neave F99 2,834 -4.3 -29.2 2.6 Malaysia
Petra Foods P34 1,461 13.3 -39.0 1.9 Indonesia
Bumitama Agri P8Z 1,343 8.5 -26.0 1.8 Indonesia
Japfa UD2 812 -2.1 -19.3 N/A Indonesia
Super Group S10 808 -13.7 -37.0 4.3 Southeast Asia
Yeo Hiap Seng Y03 749 -3.0 -24.0 1.5 Malaysia
Indofood Agri Resources 5JS 642 -6.1 -34.8 1.0 Indonesia
Del Monte Pacific D03 583 -22.1 -13.0 N/A Europe & North America
QAF Q01 573 -3.3 2.6 4.9 Australia
China Minzhong Food Corporation K2N 505 -7.8 -19.1 8.4 China
Mewah International MV4 443 -15.7 -12.9 6.2 Malaysia
Sino Grandness Food Industry Group T4B 296 20.5 4.8 N/A China
GMG Global* AXJ 287 19.0 -34.2 N/A Singapore
Average     0.3 -16.8 3.1  

Source: SGX, Bloomberg & SGX StockFacts (data as of 22 February 2016)

*Please note company is primarily focused on rubber production.

Name SGX Code P/E P/B P/CF Yesterday Price in S$ 52Wk High in S$ 52Wk Low in S$
Wilmar International F34 13.6 0.9 6.4 3.160 3.420 2.460
Thai Beverage Public Company Y92 16.5 4.1 20.4 0.690 0.810 0.660
Golden Agri-Resources E5H 70.5 0.4 5.2 0.375 0.455 0.280
First Resources EB5 15.3 2.5 14.1 1.990 2.190 1.435
Fraser and Neave F99 N/A 1.1 11.5 1.960 2.920 1.900
Petra Foods P34 N/A 4.5 16.8 2.390 4.100 1.300
Bumitama Agri P8Z 14.9 2.0 7.5 0.765 1.060 0.660
Japfa UD2 143.0 0.9 2.6 0.460 0.580 0.280
Super Group S10 14.1 1.6 12.8 0.725 1.540 0.680
Yeo Hiap Seng Y03 20.2 1.3 15.4 1.300 1.750 1.200
Indofood Agri Resources 5JS 56.5 0.4 2.9 0.460 0.815 0.410
Del Monte Pacific D03 21.3 1.4 11.1 0.300 0.480 0.280
QAF Q01 11.1 1.4 5.4 1.020 1.230 0.950
China Minzhong Food Corporation K2N 10.1 0.5 2.8 0.770 1.050 0.630
Mewah International MV4 23.7 0.7 2.3 0.295 0.390 0.260
Sino Grandness Food Industry Group T4B 5.8 0.7 4.9 0.440 0.475 0.235
GMG Global* AXJ N/A 0.4 42.7 0.375 0.820 0.270
Average   31.2 1.5 10.9      

Source: SGX, Bloomberg & SGX StockFacts (data as of 22 February 2016)

*Please note company is primarily focused on rubber production.

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Geoff Howie
Geoff Howie

Mr Howie is the Singapore Exchange's Market Strategist - and the key contributor to the educational content and market insights of SGX My Gateway. He is also part of the Associate Faculty at SIM University,  educating students on the fundamentals of investing. 

He previously held lead broking and strategist roles across the Asia Pacific offices of a large international futures broker. Outside of his 15 year career in the financial markets he has also served as the Treasury Adviser to the Leader of the Queensland Liberal Party in Queensland Parliament.

Following High School in Hong Kong, he attended University of Queensland, receiving a Bachelors and Master's degree in Economics, the latter extending into deferred PhD work after receiving the highest grading for first-mover research and modelling conducted on the Shanghai economy.

Mr Howie's other notable achievements include receiving two Hong Kong Securities Institute Outstanding Achievers awards for the 2005 year.