Wednesday, November 06, 2019

F&N: Hit by a Double Whammy

Result Update

For QE30/9/2019, F&N's net profit dropped 41% q-o-q or 16% y-o-y to RM68 million while revenue dropped 8.6% q-o-q or 2.2% y-o-y to RM975 million. Both F&B Malaysia and F&B Thailand  revenue declined by 12.8% to RM498.3 million and 3.7% (-6.6% in local currency) to RM475.5 million, respectively. F&B Malaysia revenue dropped mainly due to slower off-take in current quarter post Hari Raya Puasa festive season and pre-loading effect ahead of sugar tax implementation.

F&B Malaysia operating profit declined by 47.5% to RM27.7 million due to lower trade and marketing spending in the preceding quarter. At the same time, F&B Thailand operating profit declined by 38.9% (-42.1% in local currency) to RM60.6 million mainly due to higher investment in brand spending and new product launches and re-launches in the current quarter.

Table: F&N's last 8 quarterly results

Graph: F&N's last 52 quarterly results

Financial Position

As at 30/9/2019, F&N's financial position is deemed healthy with current ratio at 2.21 times and gearing ratio at 0.39 time.


F&N (closed at RM35.06 yesterday) is now trading at a PER of 31 times (based on last 4 quarters' EPS of 111.9 sen). At this PER, F&N is deemed fully valued.

Technical Outlook

F&N is in an uptrend line, with support at RM32.50.

Chart 1: F&N's weekly chart as at Nov 5, 2019 (Source:

Chart 2F&N's monthly chart as at Nov 5, 2019 (Source:


Despite weaker financial performance & high valuation, I rate F&N as a HOLD. The poorer result is a temporary and the technical outlook is still positive.

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post.
 However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

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