MENU

3 Things That Investors Should Know About The Billion-Dollar Japfa Ltd

Japfa Ltd (SGX: UD2) is an agri-food company that listed in Singapore in 2014. It’s a sizeable company in the local stock market right now with its market capitalisation of S$1.4 billion.

The company has three main business segments, namely, Animal Protein, Dairy, and Consumer Food. Right now, the company employs over 30,000 people across its integrated network of modern farming, processing, and distribution facilities in Indonesia, China, Vietnam, India and Myanmar.

Investors or potential investors in the company may want to know the following few things about it:

1. A growing business in 2015

In 2015, Japfa’s operating profit and profit after tax grew by 13% and 55%, respectively. The company achieved these numbers despite a 5.4% decline in revenue.

Moreover, the growth in profit after tax took place despite Japfa recording a US$42.0 million forex-related loss.

2. Possession of leading market positions

Japfa has significant market share for many segments of the agri-food industry in Indonesia, as you can see in the table below. It is also a big player in the production of day-old chicks (DOC) in Vietnam.

japfa-market-share-table
Source: Japfa 2016 investor presentation

3. Strong gains over past year

Japfa has been one of the best-performing stocks in the local market over the last 12 month – its share price has spiked by 167% from S$0.30 on 26 September 2015 to S$0.80 on 26 September 2016.

That said, early investors in the company who bought at or shortly after its initial public offering (IPO) would not have done too well. Japfa’s shares were listed at a price of S$0.80 each, the same as where it closed at yesterday. The company’s shares had plunged by nearly two-thirds after it listed before recovering.

At its current share price of S$0.80, Japfa is trading at a price-to-earnings (PE) ratio of 8.5.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.