F&N first purchase following the demerger from its property arm

F&N last Friday announced a bolt-on acquisition to its food and beverage business, acquiring a 70% stake in Malaysia-based Yoke Food Industries (YFI).

YFI manufactures, markets and distributes beverages in Malaysia and exports to Singapore, Indonesia and Indochina under brands such as Day Day, SoSoy and Juice Secret with annual turnover of more than RM85m.

This acquisition represents the first purchase by F&N following the demerger from its property arm FCL earlier in the year.

YFI currently provides contractpacking services to F&N and has manufacturing facilities that complements F&N’s beverage sales growth.

Separately, F&N will trade ex-entitlement of a SGD0.42/share capital reduction today. While the stock is trading at a
27% premium to our SOTP valuation of SGD2.90, we think the share price will be supported by expectations of further restructuring with ThaiBev to exploit crossselling synergies down the road.