FIAMMA
Fiamma Holdings Berhad
Company Background
$FIAMMA / 6939 (FIAMMA HOLDINGS BERHAD)
Research by Public
Neutral – TP RM1.02
" Inks MOU With Samyou ”
Fiamma Holdings Bhd’s (Fiamma) announced that it has entered into a Memorandum of Understanding (MOU) with Zhuhai Samyou Environmental Technology Co. Ltd (Samyou) to leverage their respective resources and expertise in establishing a sales entity and a manufacturing entity in Malaysia. We are positive on this long-term strategic cooperation opportunity, as it enables Fiamma to expand its portfolio to include Samyou’s “Vino” brand, which could help increase market share and drive sustainable growth. Pending further development from this MOU, we keep our estimates unchanged for now. We maintain our Neutral call on Fiamma with an unchanged sum-of-parts derived target price at RM1.02.
Analyst:
Denny Oh
research@publicinvestbank.com.my
$FIAMMA / 6939 (FIAMMA HOLDINGS BERHAD)
Research by Public
Neutral – TP RM1.020
" Lifted by Investment Sale and FV Gains"
Fiamma Holdings Bhd’s (Fiamma) headline net profit for 2QFY24 surged more than tenfold QoQ to RM11.5m, mainly due to higher sales and fair value gains in other investments. However, after stripping out non-recurring items, the core net profit for the quarter was down 13.8% QoQ to RM3.5m. After adjusting for non operating items, cumulative 6MFY24 results were below expectation, accounting For only 27% of our full year estimates. The discrepancies in our results were mainly due to slower than expected demand recovery from trading and services segment and widened losses from property development segment. We trim our FY24-FY25F earnings forecasts by 27%, factoring in slower demand recovery and lower sales of its completed and unsold units. Consequently, our sum-of- parts (SOP) based TP is revised to RM1.02 (previously RM1.08). We maintain a Neutral call on Fiamma.
Analyst:
Denny Oh
research@publicinvestbank.com.my
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - MR LIM SOO KONG (LIM SOO CHONG)
Change in Boardroom - MISS KWAN SOOK PENG (Amended Announcement)
Change in Boardroom - MISS KWAN SOOK PENG
Change in Audit Committee - MISS KWAN SOOK PENG
Change in Nomination Committee - MISS KWAN SOOK PENG
Change in Remuneration Committee - MISS KWAN SOOK PENG
NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) : FUND RAISINGFIAMMA HOLDINGS BERHAD ("FIAMMA" OR "COMPANY")
PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE ISSUED SHARES IN THE COMPANY ("FIAMMA SHARES" OR "SHARES") (EXCLUDING TREASURY SHARES)
OTHERSFIAMMA HOLDINGS BERHAD ("FIAMMA" OR "THE COMPANY") - CHANGE OF EXTERNAL AUDITORS
General Meetings: Outcome of Meeting
Change in Boardroom - MISS KHOR HUN NEE
Change in Audit Committee - MISS KHOR HUN NEE
Change in Remuneration Committee - MISS KHOR HUN NEE
Change in Nomination Committee - MISS KHOR HUN NEE
NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) : FUND RAISINGFIAMMA HOLDINGS BERHAD ("FIAMMA" OR THE "COMPANY")
PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE ISSUED SHARES IN THE COMPANY ("FIAMMA SHARES" OR "SHARES") (EXCLUDING TREASURY SHARES)
OTHERSFIAMMA HOLDINGS BERHAD ("FIAMMA" OR "THE COMPANY")
- DEALINGS IN QUOTED SECURITIES PURSUANT TO PARAGRAPH 9.20 OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD
$FIAMMA / 6939 (FIAMMA HOLDINGS BERHAD)
Research by PIB
Neutral – TP of MYR 1.08
“Dragged by Reversal of Fair Value Gain”
After adjusting for non-operating items, core net profit for the quarter was down 28.0% YoY to RM4.0m, mainly due to lower revenue and higher operating expenses. Results were below expectation, accounting for only 14% of our full year estimates. We keep our forecast unchanged however, as we expect better quarters ahead underpinned by new products offering, continued employment and wage growth. We retain our Neutral call with higher target price of RM1.08 (from RM1.00 previously) as we rollover over valuation to FY25F.
Analyst(s):
Denny Oh
research@publicinvestbank.com.my
Quarterly rpt on consolidated results for the financial period ended 31/03/2024
$FIAMMA / 6939 (FIAMMA HOLDINGS BERHAD)
Research by PIB
Neutral – TP of MYR 1.00
“Proposed Private Placement"
Fiamma Holdings Bhd (Fiamma) announced a private placement exercise of up to 53m shares or 10% of current issued shares. This is expected to raise gross proceeds of RM56m based on illustrative price of RM1.06/share. Most of the proceeds are earmarked for the expansion of its electrical home appliances trading business and office renovation to support the digitalisation of the existing workspace. We are slightly surprised though neutral on this move to raise fresh equity given its relatively healthy gearing ratio at 0.19x. We maintain our Neutral call with and sum-of-parts (SOP)-based TP of RM1.00 pending further clarification from management on more specific plans for these proceeds which should be earnings accretive.
Analyst(s):
Denny Oh
research@publicinvestbank.com.my
NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) : FUND RAISINGFIAMMA HOLDINGS BERHAD ("FIAMMA" OR "COMPANY")
PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE ISSUED SHARES IN THE COMPANY ("FIAMMA SHARES" OR "SHARES") (EXCLUDING TREASURY SHARES)
OTHERSFIAMMA HOLDINGS BERHAD ("FIAMMA" OR "THE COMPANY")
- PROPOSED CHANGE OF AUDITORS
Annual Report & CG Report - 2023
Statement to Shareholders in relation to the Proposed Renewal of Authority for Share Buy-Back
General Meetings: Notice of Meeting
OTHERSFIAMMA HOLDINGS BERHAD ("FIAMMA" OR "THE COMPANY")
- PROPOSED CHANGE OF AUDITORS
$3A / 0012 (THREE-A RESOURCES BERHAD) – Something's cooking?
In essence, they are a food and beverage ingredient manufacturing company.
Products portfolio, all ingredients are Halal and Kosher certified:
•Liquid Caramel, Caramel Colour
•Fermented Vinegar, Distilled Vinegar, Rice Vinegar
•Glucose Syrup, High Maltose Syrup, Liquid Maltodextrin
•Soya Protein Sauce (“sPs”)
•Hydrolysed Vegetable Protein (“HVP”) Powder
•Caramel Powder
•Soya Sauce Powder
•Maltodextrin
•Golden Syrup
FY 2022 AGM main takeaways:
• 3 products namely Caramel, Maltodextrin and Glucose represented more than 80% of the Group’s sales for FY2022.
• The total capacity of all plants is approximately 36,000MT per month and its present utilisation rate of each plant varies; ranging from 50% to 95%.
• The Group has three (3) Maltodextrin Plants with total plant capacity of around 5,000MT per month. The current utilization rate is around 80% - 90%.
• Their major raw materials are corn starch and tapioca starch, soybean meal, and refined cane sugar. So, commodity price volatility would affect them.
• These raw materials are mainly imported from Thailand, India and China. A minimum of two suppliers are always maintained for major raw material and consumables.
• They adopt a dynamic inventory holding policy to mitigate this challenge and pass on significant costs movement to customers through product selling price/ASP.
• Natural gas is used as a direct energy source to generate heat and steam. Its expenses accounted for high single digit percentage of the overall cost of sales.
• Sudden surge in freight and logistics costs will also impact them.
FY2022 Annual Report highlights:
• They recorded RM658,702mil in FY2022, highest ever revenue in their Group’s history, contributed predominantly by the higher Average Selling Prices (ASP) and increase in quantities of products sold across the board.
• Total Sales and Domestic Sales for FY2022 increased by 28% and 30% respectively. During FY 2022, exports remained stable with an overall increase of 25%
• Revenue from export of products comprised 42% of the overall revenue of the Group in FY2022. MY - 58%; SG – 10%; Others – 32%
• Despite the record high revenue achieved, profit for the Group have been impacted by higher raw material costs, energy costs, labour, transportation and other related expenses in FY2022.
• The Group’s gross profit margin has also been affected as compared to the previous year from 18.7% to 13.4% in FY2022. The prices of major raw materials of the Group, particularly corn starch and tapioca starch had increased significantly in FY2022 as compared with FY2021.
As they have just announced their Q4FY2023 results, let’s look briefly into their performance:
Current FY2023 vs Previous FY2022
• Total FY Revenue registered at ~604mil, has dropped by approx. -8%.
• But, FY PAT registered at 45.2mil, increased significantly around +29%, which bring their profit margin to 7.5%. This implies they can pass on the cost, albeit some time lag.
REVENUE FY 2023 (‘000) Contribution by geography:
MY - 330,555 - 55%
SG - 62,630 - 10%
OTHER - 210,679 - 35%
• The top 3 export countries of the Group (ex-Singapore) are Indonesia, Philippines and China.
Other interesting thing(s) to note:
• There seem to be this individual name: Mr. Teo Kwee Hock who has been trading this company’s share. He has some stake in a few other PLCs, like: $OFI / 7107 (ORIENTAL FOOD INDUSTRIES HOLDINGS BERHAD), $AYER / 2305 (AYER HOLDINGS BERHAD), $ELKDESA / 5228 (ELK-DESA RESOURCES BERHAD), $FIAMMA / 6939 (FIAMMA HOLDINGS BERHAD)… and more
• On 3 October 2022, a subsidiary of the Company, San Soon Seng Food Industries Sdn. Bhd. entered into a S&P Agreement with a third party for the acquisition of a piece of land with three (3) units of single-storey detached factory building for a total consideration of RM5.25mil.
• Climate change related challenges like rising temperatures and water shortages can significantly affect the production of the crops, leading to a potential supply chain problem that could impact them.
• Those who know how to read Mandarin can proceed to read an article coverage here: https://cutt.ly/tw6W8zgz
1/4
OTHERSFIAMMA HOLDINGS BERHAD ("FIAMMA" OR "THE COMPANY")
- PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSFIAMMA HOLDINGS BERHAD ("FHB" OR THE "COMPANY")
PROPOSED JOINT VENTURES