Food Empire has drawn a query from the Singapore Exchange for unusual trading activity.

 

Over the past year, its shares have gained 90%, as the company was able to report better numbers selling instant coffee and other products to emerging markets such as Vietnam and also Europe.

 

Analysts are expecting the company to report record earnings for FY2023.

 

The company is also eyeing another listing on the Hong Kong market, which is up today following news that China is readying a sizeable stimulus package.

 

In its response around five hours after SGX' s query, Food Empire notes that it had on Oct 16 announced its intention to seek the dual primary listing.

 

" Other than the above, the company is not aware of any information not previously announced concerning the company, its subsidiaries or associated companies which might explain the recent trading," adds Food Empire.

" Food Empire& rsquo s planned listing in Hong Kong could leave some upside for new investors. Over the past decade, the non-alcoholic beverage sector in Hong Kong has fetched a premium of 105% to the Hang Seng Index (HSI) versus the 72% premium today. Specifically, Hong Kong& rsquo s non-alcoholic beverage sector trades at a 12-month forward P/E of 13.8 times versus the 10-year average of 22 times.

 

In contrast, Food Empire trades at a forward P/E of just over 8 times and is at a discount to its global peers.  The international beverage sector trades at a P/E range of 17.3 times to 30 times with a 10-year average of 23.7 times, while the international coffee segment trades at a P/E range of 18.1 times to 25.9 times with a 10-year average of 22 times. 

 

Tan acknowledges that the market is not currently at its peak,  but he encourages investors to view the potential Hong Kong listing as a growth opportunity over the short to medium term, anticipating market recovery.

 

 

While there are no definite plans to share, Tan is not ruling out the possibility of forming joint ventures to penetrate this new market. He understands that entering this new market will entail substantial costs, but he sees it as a necessary and worthwhile commitment. & ldquo Sitting here and waiting for things to happen will not do us justice. I think we should do something rather than do nothing. There will be some costs, but we believe greater benefits will come out, much greater than the cost. We can be in better shape than we were before.& rdquo"