Oriental Food Industries

Yummy

Publish date: Fri, 11 Apr 2014, 09:00 PM

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I have a soft spot for food companies. Over the years, I have paid particular attention to such companies and invested in a few :- London Biscuits, Apollo, Mamee Double Decker, Kawan Food, etc.

But somehow, I did not notice the existence of Oriental Food Industries Holdings Bhd ("OFI") until February 2014 when they released their quarterly results.  

1. Background Info on OFI

Based on 60 million shares outstanding and latest market price of RM2.58, the company has market cap of RM155 mil. 

For the 12 months ended 31 December 2013, the group reported net profit of RM15.6 mil. This translates into PE Multiple of 10 times.

Based on cash of RM26 mil, loans of RM5.8 mil and net assets of RM142 mil, the group is in net cash position.

The latest quarter saw the group's sale crossing RM60 mil for the first time. Latest quarter net profit also reached all time high of RM4.9 mil.

Every quarter, the company pays out 2 sen dividend. Based on existing share price, dividend yield is 3.1%.

			2012					2013
(RM mil)	Mac	June	Sept	Dec	Total	Mac	June	Sept	Dec	Total
Revenue	54.5	51.8	50.1	56.1	212.5	54.2	54.0	56.1	61.4	225.7
Net profit	3.8	1.5	4.8	4.0	14.1	2.5	4.1	4.1	4.9	15.6
EPS (Sen)	6.3	2.5	8.0	6.7	23.5	4.2	6.8	6.8	8.2	26.0
DPS (sen)	2.0	1.0	3.0	2.0	8.0	2.0	2.0	2.0	2.0	8.0

2. The Group's Products

           

3. Share Price Movement

If you think that food companies are boring and only good for dividends, then you are wrong. Please refer to chart below. Over the past 12 months, stock price has quietly crept up from RM1.70 to RM2.58.

4. Concluding Remarks

OFI caught my attention because its latest quarter saw a jump in revenue and net profit.

Investors who are interested in defensive stocks that pay decent dividend can keep it in your watchlist.