Kawan Food Berhad

$KAWAN / 7216 (KAWAN FOOD BERHAD)
Research by PBIV

KUALA LUMPUR: Yinson Holdings Bhd, Astro Malaysia Holdings Bhd, TCS Group Holdings Bhd, Samaiden Group Bhd, Critical Holdings Bhd, Aizo Group Bhd and Kawan Food Bhd are among the stocks to watch on Tuesday.

$KAWAN / 7216 (KAWAN FOOD BERHAD)
Research by Public
Outperform - TP RM2.30

"Lifted by Export Sales"

Kawan Food Bhd (Kawan) reported a 47.5% YoY growth in 2QFY24 net profit to RM8.4m, primarily driven by heightened export demand especially from the Europe and North America markets. After adjusting for non-core items, Kawan’s 2QFY24 core net profit came in at RM9.0m. 1HFY24 core net profit of RM18.4m was in-line with our and consensus estimates, accounting for 49% and 51% of full-year estimates, respectively. We continue to expect frozen food demand to remain resilient as it generally offers greater convenience and a more affordable option as compared to dining out amid higher cost of living. We find Kawan’s valuation attractive, as it is currently trading at 16x, which is close to -1SD of its 3-year average forward PE. Therefore, we maintain our Outperform call on Kawan, with a lower TP of RM2.30 based on a lower PE multiple of 18x (close to 3-year average forward PE) pegged to FY25F EPS.

Analyst:
Wong Ling Ling
wong.lingling@publicinvestbank.com.my

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Intention to Deal During Closed Period

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

PUBLIC INVEST TOP PICKS 2H 2024

Push(ing) The Limits

Sentiment has been noticeably buoyant in the first half of 2024. This is more the result of a lack of “bad news” and/or market-shaking negative developments (i.e. geopolitical flare-ups, more acute supply chain disruptions, etc) however, rather than stark improvements in global economic conditions which have remained steady. Highlight of the first half has to be the artificial intelligence-driven fervour which, amongst others, saw the share price of industry-darling NVIDIA rocket >+170% higher year-to-date to catapult the company above Microsoft Inc. as the most valuable (public-listed) globally, at a point.

For 1H 2024, our view was for investors to “Stay the Course”, expecting that market conditions would be better, underpinned by healthier economic growth domestically (which has been fulfilled), a steadier earnings growth picture (which has been reflected) and traction from the various growth frameworks unveiled last year (relatively positively news flows), amongst others.

While risk premiums have risen with the risk-reward balanced skewed slightly to the downside, we think there is still sufficient reason to remain exposed to the local market, suggesting that investors “Push the Limits”.

We continue to favour names with multi-year growth stories to capture upsides from relatively steady global and domestic economic conditions. Kawan Food and QES Group are included alongside CIMB Group, Dayang Enterprise, Inari Amertron, Uzma, D&O Green Technologies and Mega First Corporation as picks going into 2H 2024. CCK Consolidated, IJM Corporation and QL Resources are replaced

$MFCB / 3069 (MEGA FIRST CORPORATION BERHAD) $QES / 0196 (QES GROUP BERHAD) $DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) $UZMA / 7250 (UZMA BERHAD) $KAWAN / 7216 (KAWAN FOOD BERHAD)

Notice of SBB by a Company Pursuant to Section 127 (16) of CA 2016

Immediate Announcement on Shares Buy Back

General Meetings: Outcome of Meeting

Additional Listing Announcement /Subdivision of Shares

Immediate Announcement on Shares Buy Back

Notice of SBB by a Company Pursuant to Section 127 (16) of CA 2016

Immediate Announcement on Shares Buy Back

Immediate Announcement on Shares Buy Back

Additional Listing Announcement /Subdivision of Shares

Notice of SBB by a Company Pursuant to Section 127 (16) of CA 2016

$KAWAN / 7216 (KAWAN FOOD BERHAD)
Research by Public
Outperform – TP RM2.40

“Recovery in Exports to North America"

Kawan Food’s (Kawan) 1QFY24 core net profit grew by 23.4% YoY to RM9.4m, primarily driven by stronger local sales due to festive spending and heightened demands from the export market. Results were in line with our and consensus expectations, accounting for 25% and 26% respectively. Nevertheless, we adjust our forecast lower by an average of 1.5% due to bookkeeping changes. We continue to like Kawan on growing demand for frozen food from both local and export markets, new product launches in addition to being supported by favourable forex rate. As the stock is currently trading at c.16x forward PE (see figure 1), valuation is deemed attractive as it is trading at -1SD of its 3-year average forward PE. We maintain our Outperform call, with a higher TP of RM2.40, as we roll over our valuation base year to 20x FY25F EPS.

Analyst:
Wong Ling Ling
wong.lingling@publicinvestbank.com.my

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

Immediate Announcement on Shares Buy Back

Immediate Announcement on Shares Buy Back

Immediate Announcement on Shares Buy Back

Annual Report & CG Report - 2023

PART A - CIRCULAR TO SHAREHOLDERS IN RELATION TO PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND PART B - STATEMENT TO SHAREHOLDERS IN RELATION TO PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN ORDINARY SHARES.

Notice of SBB by a Company Pursuant to Section 127 (16) of CA 2016

General Meetings: Notice of Meeting

Immediate Announcement on Shares Buy Back

Immediate Announcement on Shares Buy Back

Additional Listing Announcement /Subdivision of Shares

Immediate Announcement on Shares Buy Back

Notice of SBB by a Company Pursuant to Section 127 (16) of CA 2016