If you are looking to invest in Singapore Food and Beverages (F&B) stocks, here are three alternatives that you can consider investing in.

Japan Foods

In 1Q19, Japan Foods saw its revenue decrease by $0.7 million year-on-year (YoY). This was mainly attributed to a $0.5 million decline from a restaurant that was being rebranded from Ajisen Ramen to Menya Musashi.

As part of its management’s strategy to maintain growth, Japan Foods have been active in introducing new brands to the market. During 1Q19, its Shitamachi Tendon Akimitsu restaurants clocked $2.3 million in revenue and are the third largest brand by revenue behind Ajisen Ramen and Menya Musashi.

Going forward, Japan Foods will be focusing on its launch of new franchise brands Konjiki Hototogisu and Kagurazaka Saryo in the next few quarters. The group has launched the dessert brand, kagurazaka Saryo which will replace its own brand, Fruit Paradise. This new franchise will serve Japanese porridge and udon to counter Fruit Paradise’s disadvantage of being a pure dessert shop and capture lunch and dinner foot traffic.

Analysts from RHB Research reiterated their “Buy” call for Japan Foods and gave a target price of $0.58. In addition, Japan Foods has a strong balance sheet with a net cash balance of $24.5 million which translates to approximately 30 percent of its market cap.

Jumbo Group

Jumbo Group’s 3Q18 results came in line with expectations of analysts and 64 percent of consensus full-year forecasts. The profit of the quarter fell by 35 percent YoY as higher operating costs dragged down the higher revenue figure. This is mainly attributed to higher staff count to support its new outlets in PRC, expansion of its corporate office and marketing expenses relating to its 30th anniversary celebrations.

Looking forward, better profit can be expected from Jumbo’s China operations as the two newly opened outlets begin to contribute which had attributed to the higher cost in 3Q18. The expansion in China is at a faster pace as they opened two new stores in PRC this FY instead of the usual one.

In Singapore, Jumbo plans to open two new Jumbo Seafood restaurants, one Teochew cuisine outlet and two Tsui Wah outlets in the next 12 months. Potentially, the expansion of Jumbo Seafood may drive stronger sales and a better margin for the group.

Analysts from CIMB Research reiterated their “Buy” call with a target price of $0.62.

Kimly

In 3Q18, Kimly saw a stable revenue growth of 4.2 percent YoY but its profit fell by 4.8 percent YoY as it was dragged down by PPE depreciations. Recently, the main focus on Kimly was on its acquisition of Asian Story Corp, a canned drink manufacturer. Although the acquisition of Asian Story Corp will bring a higher depreciation cost to Kimly, the profitability of the newly acquired company will likely offset these costs.

Currently being distributed by Pokka in Singapore, Malaysia and Brunei, Asian Story Corp is seeking to expand its presence in ASEAN. In addition, Kimly is looking at the possibility of expanding the drinks brand to Europe as there is an increasing demand for Asian beverage with the growing Asian community in the region.

Asian Story Corp has synergies with Kimly’s main business as they are able to sell the beverages through its coffee shops. With an estimated of $60 million in net cash post Asian Story Corp acquisition, there are likely more acquisitions on the way for Kimly.

Analysts from RHB Research reiterated their “Buy” call on Kimly with a target price of $0.46.

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