3 Things That Investors Should Know About Fraser and Neave Limited and Fraser & Neave Holdings

Fraser and Neave Limited (SGX: F99) is a Singapore-listed company and has local business here. But, a big part of its business actually comes from its major Malaysia-listed subsidiary, Fraser & Neave Holdings Bhd (KLSE: 3689.KL).

The Malaysian company is mainly involved with food & beverages and real estate. Its food & beverage arm makes it similar to other Singapore-listed companies such as  Yeo Hiap Seng Ltd (SGX: Y03).

Let’s take a look at three things about Fraser & Neave Holdings that may interest investors:

1. Growing revenue and profit over last 10 years

Over its last 10 fiscal years from FY2006 (fiscal year ended 30 September 2006) to FY2015, Fraser & Neave Holdings’ revenue has more than doubled from RM 1.94 billion to RM 4.06 billion. For the same period, the company’s net income has doubled from RM 143 million to RM 280 million.

These numbers represent annual growth rates of 8.6% and 7.8% for the company’s revenue and net profit, respectively.

2. Significant market share in key markets

Fraser & Neave Holdings derives the majority of its income from two countries – Malaysia and Thailand. In those two countries, it has significant share in different beverage segments.

Here are a few examples:

100Plus is the leader in the isotonic drinks segment in Malaysia with an 80% market share.

Brands such as F&N NutriSoy and F&N Seasons are leaders in Malaysia in their respective soya drinks and ready-to-drink tea segments.

In the sweetened condensed milk and evaporated milk categories in Malaysia, F&N holds a market share of 60%, selling brands such as F&N, Tea Pot, Gold Coin, and Cap Junjung.

In Thailand, F&N holds No.1 position in the total condensed milk product category.

3. A long history of paying dividends

Fraser & Neave Holdings has paid a dividend in each year over its last 10 fiscal years. Its payout in each year has also been easily more than 60% of its earnings per share.

In 2015, the company paid out a dividend of RM 0.575 per share. With its 2015 EPS of RM 0.765, this translates to a pay-out ratio of 75%.

At Fraser & Neave Holdings’ current share price of RM 24.48, it has a historical dividend yield of 2.4%.

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