Conscience Food Holdings

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#1
Anyone following this counter? Was doing well previously and declared a 'buy' by some brokerages. Revenue and profit were declining in the earlier quarters as they went into beverages and cup noodles. New revenue streams kicking in this quarter and the next few. They are active mainly in Sumatera but building their presence in the main population centre of Java. The only product of theirs that I see in Spore is Alhamie instant noodles, which is one of the cheapest in its category. NAV about sgd $0.20 and PE at $0.176 is less than 3. They are a consumer company in the largest consumer market in SEA. Would appreciate thoughts of other value buddies.
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#1
Anyone following this counter? Was doing well previously and declared a 'buy' by some brokerages. Revenue and profit were declining in the earlier quarters as they went into beverages and cup noodles. New revenue streams kicking in this quarter and the next few. They are active mainly in Sumatera but building their presence in the main population centre of Java. The only product of theirs that I see in Spore is Alhamie instant noodles, which is one of the cheapest in its category. NAV about sgd $0.20 and PE at $0.176 is less than 3. They are a consumer company in the largest consumer market in SEA. Would appreciate thoughts of other value buddies.
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#2
Price seemed to have hit rock bottom this week- $0.151. Some recovery was seen yesterday. Share price has been on a downtrend for the past 2 weeks. Volumes are higher than usual. They recently reported, via the AR that their internal auditors "have identified 19 areas where internal controls (of PT Olagafood Industri Makanan) can be improved, ranking in severity from low to medium". On 14 Nov, as a follow up, they announced that 12 of the areas of concern have been resolved while the rest are expected to be resolved by the 1st Q of 2013. Wonder if this is the reason for the share price weakness. Must laud the coy for its transparency but hopefully there are no skeletons in the closet. Otherwise the financial ratios still look decent although start up costs, increased competition, increased labour cost, increased raw food cost and promotional activities are eating into profits. Currency exchange risk is also applicable here. Meanwhile the cup noodle and beverage business should be gaining momentum in the coming quarters as their new factories in Jakarta and Medan go into operation.
This is not an inducement to buy but a call for any information that may a account for the share price decline.
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#2
Price seemed to have hit rock bottom this week- $0.151. Some recovery was seen yesterday. Share price has been on a downtrend for the past 2 weeks. Volumes are higher than usual. They recently reported, via the AR that their internal auditors "have identified 19 areas where internal controls (of PT Olagafood Industri Makanan) can be improved, ranking in severity from low to medium". On 14 Nov, as a follow up, they announced that 12 of the areas of concern have been resolved while the rest are expected to be resolved by the 1st Q of 2013. Wonder if this is the reason for the share price weakness. Must laud the coy for its transparency but hopefully there are no skeletons in the closet. Otherwise the financial ratios still look decent although start up costs, increased competition, increased labour cost, increased raw food cost and promotional activities are eating into profits. Currency exchange risk is also applicable here. Meanwhile the cup noodle and beverage business should be gaining momentum in the coming quarters as their new factories in Jakarta and Medan go into operation.
This is not an inducement to buy but a call for any information that may a account for the share price decline.
Reply
#3
Has the company distributed any dividend since Day 1? What are the key investment merits? Tks.
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
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#3
Has the company distributed any dividend since Day 1? What are the key investment merits? Tks.
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
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#4
Looks like fairly interesting to understand business: starting with instant noodles, then using IPO proceeds for cup noodles and now drinks bottling operation. Company did mention that they have about 4% of the domestic instant mee market and wants to grow it to 10%. With focus on the less heard of region like Sumatra, Aceh etc, it seems a growth area to enter earlier to capture the mind-share of consumers there.

Appears to be an owner-centric business with controlling S/H holding more than 50% of company. The Company pays a 0.68c dividend (4.3% on 16c closing price). The reason for the suspension in dividend was to preserve cash for the capex expansion.

Downside could be geographical risk. Being an Indonesian Company, local investors like you or me are untrained in the Indonesian laws and practises, and may not be willing to stomach the risks associated with it.

The growth in NAV post-IPO is impressive, I like a simple to understand business and strong cash-generating abililty. Though still 5 mins into the AR, i do think this Company deserves more of my time reading.

Does any forumers know where to buy its Alhamie brand of instant mie in SG? I'll like to try it and vote for its investment merit through my stomach!
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#4
Looks like fairly interesting to understand business: starting with instant noodles, then using IPO proceeds for cup noodles and now drinks bottling operation. Company did mention that they have about 4% of the domestic instant mee market and wants to grow it to 10%. With focus on the less heard of region like Sumatra, Aceh etc, it seems a growth area to enter earlier to capture the mind-share of consumers there.

Appears to be an owner-centric business with controlling S/H holding more than 50% of company. The Company pays a 0.68c dividend (4.3% on 16c closing price). The reason for the suspension in dividend was to preserve cash for the capex expansion.

Downside could be geographical risk. Being an Indonesian Company, local investors like you or me are untrained in the Indonesian laws and practises, and may not be willing to stomach the risks associated with it.

The growth in NAV post-IPO is impressive, I like a simple to understand business and strong cash-generating abililty. Though still 5 mins into the AR, i do think this Company deserves more of my time reading.

Does any forumers know where to buy its Alhamie brand of instant mie in SG? I'll like to try it and vote for its investment merit through my stomach!
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#5
Can get it from NTUC Fairprice. Try the mee goreng extra hot.

implementation risk will be one. The company had intended to launch beverage earlier but there was delay. Similar with cup noodle. Delay due to change in packaging.

Another risk will be competition with well known brand like indo mee as it strives to expand its market share in java.
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#5
Can get it from NTUC Fairprice. Try the mee goreng extra hot.

implementation risk will be one. The company had intended to launch beverage earlier but there was delay. Similar with cup noodle. Delay due to change in packaging.

Another risk will be competition with well known brand like indo mee as it strives to expand its market share in java.
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#6
(09-12-2012, 10:23 PM)Share Investor Wrote: Can get it from NTUC Fairprice. Try the mee goreng extra hot.

implementation risk will be one. The company had intended to launch beverage earlier but there was delay. Similar with cup noodle. Delay due to change in packaging.

Another risk will be competition with well known brand like indo mee as it strives to expand its market share in java.

Indomie is probably too a giant for them. i think if u can capture certain key regional market you can do well.

just wondering about the management capability besides the chairman. i expect the execution on new launches to be managed better but if the company learns valuable lessons, it'll no doubt put them in good stead for future growth. im gg to find the noodles on my next trip to the supermarket and will report back after my taste test!
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#6
(09-12-2012, 10:23 PM)Share Investor Wrote: Can get it from NTUC Fairprice. Try the mee goreng extra hot.

implementation risk will be one. The company had intended to launch beverage earlier but there was delay. Similar with cup noodle. Delay due to change in packaging.

Another risk will be competition with well known brand like indo mee as it strives to expand its market share in java.

Indomie is probably too a giant for them. i think if u can capture certain key regional market you can do well.

just wondering about the management capability besides the chairman. i expect the execution on new launches to be managed better but if the company learns valuable lessons, it'll no doubt put them in good stead for future growth. im gg to find the noodles on my next trip to the supermarket and will report back after my taste test!
Reply
#7
There are several well-known instant noodle brands in Indonesia : Indomie, Supermi, Sarimi, Mie Sedaap, Salam Mie, Mi ABC, Mie Kare, Alhami, Sakura Mi Instan, and Gaga Mie.
Indomie, Supermi, Sarimi, Sakura are produced by Indofood Sukses Makmur. Mie Sedaap is produced by Wings Food.
These 2 instant noodle producers probably get 95% market shares ??
Specuvestor: Asset - Business - Structure.
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#7
There are several well-known instant noodle brands in Indonesia : Indomie, Supermi, Sarimi, Mie Sedaap, Salam Mie, Mi ABC, Mie Kare, Alhami, Sakura Mi Instan, and Gaga Mie.
Indomie, Supermi, Sarimi, Sakura are produced by Indofood Sukses Makmur. Mie Sedaap is produced by Wings Food.
These 2 instant noodle producers probably get 95% market shares ??
Specuvestor: Asset - Business - Structure.
Reply
#8
(10-12-2012, 11:02 AM)cyclone Wrote: There are several well-known instant noodle brands in Indonesia : Indomie, Supermi, Sarimi, Mie Sedaap, Salam Mie, Mi ABC, Mie Kare, Alhami, Sakura Mi Instan, and Gaga Mie.
Indomie, Supermi, Sarimi, Sakura are produced by Indofood Sukses Makmur. Mie Sedaap is produced by Wings Food.
These 2 instant noodle producers probably get 95% market shares ??

I think they did mention somewhere Conscience has about 4% of the market. For them to go against the jaggernuts like Indofood will not be easy. But the market is definitely growing in Indonesia. Besides the organic growth in instant noodles, will be good for the Company to articulate their strategies too.
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#8
(10-12-2012, 11:02 AM)cyclone Wrote: There are several well-known instant noodle brands in Indonesia : Indomie, Supermi, Sarimi, Mie Sedaap, Salam Mie, Mi ABC, Mie Kare, Alhami, Sakura Mi Instan, and Gaga Mie.
Indomie, Supermi, Sarimi, Sakura are produced by Indofood Sukses Makmur. Mie Sedaap is produced by Wings Food.
These 2 instant noodle producers probably get 95% market shares ??

I think they did mention somewhere Conscience has about 4% of the market. For them to go against the jaggernuts like Indofood will not be easy. But the market is definitely growing in Indonesia. Besides the organic growth in instant noodles, will be good for the Company to articulate their strategies too.
Reply
#9
(10-12-2012, 11:53 AM)guru Wrote:
(10-12-2012, 11:02 AM)cyclone Wrote: There are several well-known instant noodle brands in Indonesia : Indomie, Supermi, Sarimi, Mie Sedaap, Salam Mie, Mi ABC, Mie Kare, Alhami, Sakura Mi Instan, and Gaga Mie.
Indomie, Supermi, Sarimi, Sakura are produced by Indofood Sukses Makmur. Mie Sedaap is produced by Wings Food.
These 2 instant noodle producers probably get 95% market shares ??

I think they did mention somewhere Conscience has about 4% of the market. For them to go against the jaggernuts like Indofood will not be easy. But the market is definitely growing in Indonesia. Besides the organic growth in instant noodles, will be good for the Company to articulate their strategies too.

Management did mention that one of the main focus is to develop beverage which can generate more income than instant noddle on a per unit basis. However, how good the company can execute this initiative remains to be seen.

One thing I am not too sure is why company goes for loan for expansion when they have the cash.
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#9
(10-12-2012, 11:53 AM)guru Wrote:
(10-12-2012, 11:02 AM)cyclone Wrote: There are several well-known instant noodle brands in Indonesia : Indomie, Supermi, Sarimi, Mie Sedaap, Salam Mie, Mi ABC, Mie Kare, Alhami, Sakura Mi Instan, and Gaga Mie.
Indomie, Supermi, Sarimi, Sakura are produced by Indofood Sukses Makmur. Mie Sedaap is produced by Wings Food.
These 2 instant noodle producers probably get 95% market shares ??

I think they did mention somewhere Conscience has about 4% of the market. For them to go against the jaggernuts like Indofood will not be easy. But the market is definitely growing in Indonesia. Besides the organic growth in instant noodles, will be good for the Company to articulate their strategies too.

Management did mention that one of the main focus is to develop beverage which can generate more income than instant noddle on a per unit basis. However, how good the company can execute this initiative remains to be seen.

One thing I am not too sure is why company goes for loan for expansion when they have the cash.
Reply
#10
(10-12-2012, 02:16 PM)Share Investor Wrote:
(10-12-2012, 11:53 AM)guru Wrote:
(10-12-2012, 11:02 AM)cyclone Wrote: There are several well-known instant noodle brands in Indonesia : Indomie, Supermi, Sarimi, Mie Sedaap, Salam Mie, Mi ABC, Mie Kare, Alhami, Sakura Mi Instan, and Gaga Mie.
Indomie, Supermi, Sarimi, Sakura are produced by Indofood Sukses Makmur. Mie Sedaap is produced by Wings Food.
These 2 instant noodle producers probably get 95% market shares ??

I think they did mention somewhere Conscience has about 4% of the market. For them to go against the jaggernuts like Indofood will not be easy. But the market is definitely growing in Indonesia. Besides the organic growth in instant noodles, will be good for the Company to articulate their strategies too.

Management did mention that one of the main focus is to develop beverage which can generate more income than instant noddle on a per unit basis. However, how good the company can execute this initiative remains to be seen.

One thing I am not too sure is why company goes for loan for expansion when they have the cash.

I've done some research in this company before and vested(previously).

Even thought the PE looks very attractive, the company is not performing as expected in the last 2 quarters.

Indonesia, in general is still a poor country and local population do mix instant noodle with rich as a staple food as they can't afford purely rice.

Looking this industry, Pricing will be an important factor, which will influence the market shares and this is where Conscience Food market segment is.

So far, I do not see them having a strong economic moat:
a. Any price reduction in their competitors will erode their market shares.
b. Cost of raw material increase will affect their cost which is difficult to be passed down to consumer.

In addition, there is not much transparency and information about their management except those posted in SGX and some info which were featured at some security firms' research report and forum.

No dividend and AGM been called in SG for the past 2 years.

You decide whether to invest.

My 2 cents
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#10
(10-12-2012, 02:16 PM)Share Investor Wrote:
(10-12-2012, 11:53 AM)guru Wrote:
(10-12-2012, 11:02 AM)cyclone Wrote: There are several well-known instant noodle brands in Indonesia : Indomie, Supermi, Sarimi, Mie Sedaap, Salam Mie, Mi ABC, Mie Kare, Alhami, Sakura Mi Instan, and Gaga Mie.
Indomie, Supermi, Sarimi, Sakura are produced by Indofood Sukses Makmur. Mie Sedaap is produced by Wings Food.
These 2 instant noodle producers probably get 95% market shares ??

I think they did mention somewhere Conscience has about 4% of the market. For them to go against the jaggernuts like Indofood will not be easy. But the market is definitely growing in Indonesia. Besides the organic growth in instant noodles, will be good for the Company to articulate their strategies too.

Management did mention that one of the main focus is to develop beverage which can generate more income than instant noddle on a per unit basis. However, how good the company can execute this initiative remains to be seen.

One thing I am not too sure is why company goes for loan for expansion when they have the cash.

I've done some research in this company before and vested(previously).

Even thought the PE looks very attractive, the company is not performing as expected in the last 2 quarters.

Indonesia, in general is still a poor country and local population do mix instant noodle with rich as a staple food as they can't afford purely rice.

Looking this industry, Pricing will be an important factor, which will influence the market shares and this is where Conscience Food market segment is.

So far, I do not see them having a strong economic moat:
a. Any price reduction in their competitors will erode their market shares.
b. Cost of raw material increase will affect their cost which is difficult to be passed down to consumer.

In addition, there is not much transparency and information about their management except those posted in SGX and some info which were featured at some security firms' research report and forum.

No dividend and AGM been called in SG for the past 2 years.

You decide whether to invest.

My 2 cents
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