Food Empire Holdings Ltd (FEH SP): Continued growth and expansion
BUY Entry – 1.12 Target– 1.22 Stop Loss – 1.07
Food Empire Holdings Limited operates as a food and beverage manufacturing and distribution company. The Company offers beverages and snacks including classic and flavoured coffee mixes and cappuccinos, chocolate drinks, fruit-flavoured and bubble teas, cereal blends, and crispy potato snacks. Food Empire Holdings serves customers worldwide.
Sustained Growth in Southeast Asia to Drive Topline Expansion. Food Empire continues to see strong revenue growth in its Southeast Asian markets, particularly in Vietnam, where demand remains robust. The region’s revenue increased 27.3% to US$129.4 million, driven by past and ongoing investments in brand development. Management expects this momentum to continue, supported by strategic commercial initiatives aimed at capturing opportunities across the region. In Vietnam, the Group is focused on strengthening brand presence and accelerating consumer acquisition to sustain its growth trajectory. The country’s coffee market is projected to grow at a CAGR of 8.13% over the next five years, reaching US$552.6 million by 2025—a trend that Food Empire is well-positioned to capitalize on. In Malaysia, the Group completed the expansion of its non-dairy creamer manufacturing facility in 2Q2024, with production capacity expected to reach full utilization within the next two to three years. Additionally, its snack manufacturing facility expansion is set for completion in 1Q2025, with commercial production beginning in 2Q2025. These initiatives will continue fueling strong growth in the Group’s Southeast Asian operations in FY25.
Expansion of Production Capabilities to Strengthen Market Leadership. As part of its regional expansion strategy, Food Empire is investing in new production facilities to enhance supply chain efficiency and market positioning. By end-2025, the Group expects to complete its first coffee-mix production facility in Kazakhstan, improving service efficiency across Central Asia. In Vietnam, Food Empire has committed to building a freeze-dried soluble coffee manufacturing facility, expected to be completed by 2028. This investment will further establish the Group as one of Asia’s leading producers of freeze-dried soluble coffee. These expansions will not only strengthen Food Empire’s supply chain but also reinforce its market leadership across key regions.
Defensive F&B industry globally. The global food and beverage industry is inherently defensive, driven by stable demand for essential consumer goods rather than discretionary spending. This resilience provides a natural hedge during economic downturns, as consumers continue to prioritize necessities. Food Empire further strengthens its position through its diversified distribution network, which helps mitigate regional economic risks and ensures a steady revenue stream. While industry challenges such as supply chain fluctuations and rising operational costs persist, the company’s strategic focus on core product categories and efficient supply chain management reinforces its stability. As a result, Food Empire remains well-positioned within the globally defensive F&B sector, offering investors a degree of protection against economic volatility.
2H24 results review. Total revenue for 2H24 increased by 10.4% YoY to US$251.1mn from US$227.5mn in 2H23, led by strong growth in its South-East Asia, South Asia, as well as Ukraine, Kazakhstan and Commonwealth of Independent States segments. Its net profit fell 3.2% to US$28.9mn for 2H24, from US$29.8mn in the same period the year before. EPS for the period stood at US$0.0549, down from US$0.0567. The group proposed a dividend per share of S$0.08, comprising a final dividend of S$0.06 and a special dividend of S$0.02.
We have fundamental coverage with a BUY recommendation and a TP of S$1.35. Please read the full report here.
Market Consensus.
(Source: Bloomberg)
DBS Group Holdings Ltd (DBS SP): Budget’25 to boost economy
DBS Group Holdings Limited and its subsidiaries provide a variety of financial services. The Company offers services including mortgage financing, lease and hire purchase financing, nominee and trustee, funds management, corporate advisory and brokerage. DBS Group also acts as the primary dealer in Singapore government securities.
Potential benefits from budget. On 18 February, Prime Minister Lawrence Wong announced a bonanza of vouchers, credits, tax rebates and enhanced wage support for Singaporeans and corporations. Singapore’s budget 2025 introduced measures that could bolster local banks by stimulating economic activity and improving credit conditions. Infrastructure investments, including top-ups to key funds, are likely to drive higher loan demand. The 50% corporate tax rebate for SMEs may ease financial pressures, reducing asset quality risks for banks. Consumer-focused initiatives could support spending while mitigating inflationary risks, lowering non-performing loans. Additionally, incentives for SGX listings and fund management may enhance capital market activity, benefiting banks through increased trading volumes and demand for financial products. Overall, the budget measures are expected to create a favourable environment for Singapore banks, driving loan growth, improving asset quality, and supporting broader financial sector activity.
Leadership changes ahead of CEO transition. DBS Bank has appointed Derrick Goh as its first Group Chief Operating Officer (COO), effective 1 April, overseeing operations and transformation. He will also join the bank’s executive committee. Koh Kar Siong will take over as head of audit and join the management committee. Additionally, Jimmy Ng, current head of operations, will retire on 1 July but continue as a senior adviser for AI until year-end. These changes come as Piyush Gupta prepares to step down as CEO on 28 March, with Tan Su Shan, deputy CEO since August 2024, set to succeed him. The leadership changes at DBS Bank signal a strategic transition aimed at sustaining growth and strengthening its operational and digital transformation efforts. DBS’ leadership changes reinforce its commitment to operational efficiency, and governance, ensuring continued growth amid evolving global banking trends. The bank is well-positioned for sustained profitability and market leadership under its new executive team.
Special bonus and capital return amid record profits. DBS will distribute a one-time S$1,000 bonus to all staff except senior managers, totaling S$32 million, as a reward for their contribution to its record performance. This bonus will benefit 90-95% of employees. The bank also announced a capital return dividend of S$0.15 per share per quarter for FY25, with plans for similar distributions over the next two years. This is part of its strategy to reduce excess capital through dividends, special payouts, and share buybacks. For 4Q24, DBS reported a net profit of S$2.52 billion, 11% YoY increase, bringing its full-year net profit to a record S$11.29 billion, up 12% YoY. Despite macroeconomic uncertainty, interest rate trends and geopolitical risks, DBS managed to outperform expectations. We believe that the bank remains well-positioned for long-term growth, backed by record earnings, strong leadership succession, and continued investment in technology.
4Q24 results review. Total income for 4Q24 rose 11% to S$5.51bn and net profit rose 11% YoY to S$2.52bn, compared with S$2.27bn from the year-ago period. DBS’ full-year net profit was brought to a new record high of S$11.29bn, up 12% from the year-ago period. DBS declared Q4 dividend at S$0. 0.15 per share per quarter to be paid out over financial year 2025; it expects to pay out a similar amount of capital in the next two years.
Market Consensus.
(Source: Bloomberg)
China Resources Power Holdings Co Ltd (836 HK): Continued growth in electricity demand
BUY Entry – 17.8 Target – 20.4 Stop Loss – 16.5
China Resources Power Holdings Company Limited is a Hong Kong-based investment holding company principally engaged in the investment, development and operation of power plants. The Company operates through three segments. Thermal Power segment is engaged in the investment, development, operation and management of coal-fired power plants and gas-fired power plants, as well as the sales of heat and electricity. Renewable Energy segment is engaged in wind power generation, hydroelectric power generation and photovoltaic power generation, as well as the sales of electricity. Coal Mining segment is engaged in the mining of coal mines, as well as the sales of coal. The Company mainly operates businesses in China.
Robust Electricity Demand Growth in China. According to the IEA’s Electricity 2025 report, global electricity demand is set to accelerate, with emerging and developing economies driving 85% of additional consumption over the next three years. China, in particular, has experienced electricity demand outpacing GDP growth since 2020. Consumption rose 7% in 2024 and is expected to grow at an average rate of 6% annually through 2027. This increase is largely driven by industrial demand, including energy-intensive manufacturing in sectors such as solar panels, batteries, electric vehicles, and associated materials. As China’s power consumption continues to climb, China Resources Power Holdings stands to benefit significantly from sustained demand growth.
Strong Growth in Renewable Energy Generation. Despite an overall decline in energy generation in January—primarily due to an 11.0% YoY drop in thermal power output and the impact of the Chinese New Year holiday—China Resources Power Holdings saw significant growth in its renewable energy segment. Wind power generation increased 14.1% YoY to 4,266,011 MWh, solar (photovoltaic) power generation surged 45.4% YoY to 565,676 MWh, while hydropower generation rose 18.9% YoY to 162,395 MWh. This strong performance underscores the company’s strategic shift towards renewable energy expansion, aligning with China’s clean energy transition goals. As government policies continue to support renewable energy adoption, China Resources Power Holdings is well-positioned to benefit from rising demand and favorable regulatory tailwinds.
Optimizing Capital Structure to Support Future Growth. In late 2024, China Resources Power Holdings raised HK$3.89bn through a share placement aimed at debt repayment and corporate management initiatives. The company placed 198.5mn shares (over 4% of total share capital) at HK$19.70 per share, a 5.1% discount to the last closing price of HK$20.75 on October 22. In a separate transaction, it issued 168.1mn shares to its controlling shareholder, China Resources (Holdings), under a subscription agreement for HK$3.31bn. These capital-raising efforts enhance financial flexibility, optimize the company’s capital structure, and provide resources to fuel future expansion. With a stronger balance sheet, China Resources Power Holdings is well-positioned to support its renewable energy ambitions and long-term growth strategy.
1H24 earnings. Revenue fell marginally by 0.71% YoY to HK$51.1bn in 1H24, compared to HK$51.5bn in 1H23. Net profit increased by 40.6% to HK$9.95bn in 1H24, compared to HK$7.08bn in 1H23. Basic EPS rose to HK$1.95 in 1H24, compared to a basic EPS of HK$1.40 in 1H23.
Market consensus.
(Source: Bloomberg)
Sichuan Baicha Baidao Industrial Co Ltd (2555 HK): Optimisn surrounding the China’s tea market
Sichuan Baicha Baidao Industrial Co Ltd is a China-based company mainly engaged in the development and sales of diversified tea beverage products. The Company’s main business is to provide combinations of natural ingredients with Chinese tea drinks through franchisees and focus on the production and sales of tea drinks to customers. The Company operates its own product brand Chabaidao. The Company’s products include classic tea drinks typically available throughout the year, and seasonal tea drinks and regional tea drinks only sold in limited time periods or certain regions, including milk tea, fresh fruit tea, juice, and others. The Company mainly conducts its business in the domestic market.
Positive market sentiments towards the chinese tea and beverage market. China’s largest fresh-drink company, Mixue Group, is set to raise HK$3.45 billion (US$444 million) through a Hong Kong IPO to fuel its expansion amid intensifying competition. With a network of over 45,000 stores across mainland China and 11 international markets—including Southeast Asia, Australia, Japan, and South Korea—Mixue plans to allocate the proceeds toward production facility upgrades, brand enhancement, marketing, working capital, and general corporate purposes. The listing underscores investor confidence in the resilience and profitability of the tea and beverage sector. A strong market reception for Mixue’s IPO could generate positive spillover effects for other industry players, such as Baicha Baidao, which operates in a similar market segment. This renewed optimism may drive a broader revaluation of tea-related stocks, potentially boosting Baicha Baidao’s share price as investor interest in the sector grows.
More efforts to boost consumption in China. China is ramping up efforts to boost domestic consumption, with Premier Li Qiang recently emphasizing targeted measures to stimulate consumer spending and improve livelihoods. This policy shift is expected to benefit F&B companies like Sichuan Baicha Baidao, which could see higher sales as consumer demand strengthens. Additionally, investors and economists are closely watching China’s annual parliamentary meeting in early March for potential stimulus measures, particularly as the country faces growing uncertainties in its export sector amid U.S. President Donald Trump’s return to the White House.
Growth of the Chinese tea market supports long-term expansion. The rapid expansion of China’s tea and beverage sector presents a strong tailwind for Sichuan Baicha Baidao. The Chinese-style tea market reached RMB193.3bn in 2023, reflecting a 15.7% YoY increase, with projections to surpass RMB250bn by 2025. This sustained growth is driven by shifting consumer preferences toward premium and innovative tea-based drinks. As a key player in the industry, Baicha Baidao is well-positioned to capitalize on rising demand, benefiting from increasing store openings, product innovation, and expanding consumer adoption.
1H24 earnings. Revenue fell by 10.0% YoY to RMB2,395.8mn in 1H24, compared to RMB2,660.7mn in 1H23. Profit decreased by 59.9% from RMB595.4mn in the first half of last year to RMB238.6mn. Basic earnings per share was RMB0.178 in 1H24, compared to a basic earnings per share of RMB0.549 in 1H23.
Market consensus.
(Source: Bloomberg)
Waste Management Inc (WM US): Unshaken by inflation
BUY Entry – 230 Target – 260 Stop Loss – 215
Waste Management Inc, through its subsidiaries, provides environmental solutions for residential, commercial, industrial, and municipal customers in the United States, Canada, Western Europe, and other international regions.
Resilient business model. The company’s operating model is similar to a public utility, providing essential waste management services that maintain consistent demand regardless of economic conditions. This allows the company to sustain stable growth even during economic uncertainty or periods of inflation. While macroeconomic fluctuations (such as tariff policies) may impact broader markets, the necessity of waste management services ensures the company’s importance and resilience.
Synergies from acquisitions. Last year, the company successfully acquired Stericycle for $7.2 billion, making it a leader in the medical waste recycling market. It expects to generate $250 million in synergies over the next three years. For fiscal year 2025, the company anticipates revenue between $25.55 billion and $25.8 billion, demonstrating confidence in its growth potential.
4Q24 results. Revenue grew 12.8% YoY to US$5.89bn, missing estimates by US$20mn. Non-GAAP EPS was US$1.70, missing expectations by US$0.10. The company projected FY25 revenue of between US$25.55bn to US$25.80bn.
Market consensus
(Source: Bloomberg)
Costco Wholesale Corp (COST US): Counter inflationary play
Costco Wholesale Corporation is a membership-only warehouse club. The company sells a wide variety of merchandise, including groceries, automotive supplies, toys, hardware, sporting goods, jewelry, electronics, apparel, health and beauty products, and other miscellaneous items. Costco Wholesale serves consumers worldwide.
Rising inflation does not hinder good sales growth. U.S. inflation remained high in January, while U.S. retail sales fell by 0.9% month-over-month and rose by 4.2% year-over-year. The company’s U.S. comparable net sales in January rose by 9.2% year-over-year to $19.51 billion. 36% of the company’s members have an annual income exceeding $125,000, a group that is relatively less affected by inflation and has more stable spending habits. Because the company’s primary target customer base is relatively high-income, membership retention rates are high.
Defensive and growth attributes. The company’s business model differs from that of general large supermarkets, which maintain operations through low-profit, high-volume sales. Costco maintains ultra-low wholesale prices, and its main source of profit is membership fees. The growth of membership numbers and increases in membership fees are long-term growth drivers. As of December 2024, the number of paid household memberships reached 77.4 million, an increase of approximately 8% year-over-year, and the total number of cardholders reached 138.8 million. The global membership renewal rate is 90.4%. In addition, since September 1, 2024, membership fees in the United States and Canada have been increased, with the annual fee for regular memberships increasing from $60 to $65, and the annual fee for executive memberships increasing from $120 to $130. Membership fees in South Korea will increase by 7.5% to 15.2% in May 2025. The company currently operates 897 warehouses in 13 countries and plans to open 29 new warehouses in 2025, 12 of which will be outside the United States.
1Q25 results. Revenue grew 7.5% YoY to US$62.15bn, beating estimates by US$150mn. Non-GAAP EPS was US$3.82, exceeding expectations by US$0.03.
Trading Dashboard Update: Take profit on Singapore Technologies Engineering Ltd (STE SP) at S$5.40. Add People’s Insurance Company Group of China (1339 HK) at HK$3.85, Sichuan Baicha Baidao Industrial Co Ltd (2555 HK) at HK$10.40 and Costco Wholesale Corp (COST US) at US$1,040. Cut loss on AAC Technologies Holdings Inc (2018 HK) at HK$45.
