Kuala Lumpur: Analysts remained positive on Fraser and Neave Holdings Bhd’s (FandN) outlook despite the company reporting a lower net profit for the second quarter ended March 31, 2025 (2Q FY2025).
According to BERNAMA News Agency, FandN’s 2Q FY2025 net profit fell to RM140.34 million from RM165.41 million in the same quarter last year, while revenue was also slightly lower at RM1.33 billion versus RM1.35 billion previously.
In a note today, MIDF Amanah Investment Bank Bhd expressed optimism about the company’s prospects, anchored by its strong earnings, defensiveness, and resilient consumer base. It highlighted that demand for essential food and beverage products remains stable despite inflationary pressures and global macro uncertainties, reinforcing its position as a dependable consumer staple.
The group continues to benefit from robust demand for ready-to-drink beverages and a recovery in tourism across Malaysia and Thailand, which supports out-of-home consumption trends. Over the longer term, growth will be underpinned by its integrated dairy farm in Gemas, strengthening supply chain resilience and enabling FandN to capture opportunities within Malaysia’s underserved fresh milk market.
MIDF stated it also maintained its earnings forecasts on FandN as the group’s first half of 2025 (1H FY2025) results align with expectations and retained its target price (TP) at RM32.68, with a ‘buy’ call on the food and beverage (FandB) company. For 1H FY2025 ended March 31, 2025, FandN’s net profit fell to RM309.36 million against RM336.15 million in the previous corresponding period, while revenue increased by 1.4 percent to RM2.72 billion compared with RM2.69 billion in the same period previously.
Meanwhile, CIMB Investment Bank Bhd expects FandN to post slightly weaker half-on-half results in 2H FY25F, as the recovery in Indochina sales is likely to be offset by start-up losses from their dairy venture and higher input costs. Despite this, they maintain a ‘buy’ rating and TP of RM29.70 on FandN, supported by its attractive valuation of 17.9 times the projected earnings for the calendar year 2025 (CY25F P/E), which represents a 10.5 percent discount to the company’s average P/E over the past five years. With 1H FY2025 results in line, no changes are made to the FY2025-2027F earnings per share for FandN.
CIMB Investment Bank continues to favor FandN for its strong market positioning in the FandB space of Malaysia and Thailand, with its established brands, defensive demand for its products, and strong track record.