MIDF Research believes the privatisation of Cocoaland will enable F&N to expand its business into other packaged food segments.
Due to stronger demand for gummies in Malaysia and an increased snack demand from Saudi Arabia, Cocoaland’s revenue for first quarter ended March 31, 2022 rose 21.5% year-on-year to RM65.74mil, while its net profit surged 85.4% y-o-y to RM10.55mil. “F&N believes that the addition of Cocoaland will enhance its expansion in overseas markets,” UOBKH Research said. “Currently, close to 50% of Cocoaland’s revenue is export-driven, predominantly in Asia.”
UOBKH Research said F&N should remain at a net cash position even after the completion of the privatisation. However, the research firm concur with F&N that the acquisition can fortify the group’s plan to expand its halal packaged food segment, an earmarked growth pillar. “Given F&N’s management’s track record, F&N may be able to unlock and realise the full potential of Cocoaland.