9 Simple Numbers For Investors To Understand QAF Limited

QAF Limited (SGX: Q01) is a food production company. Its business activities include bakery operations, pork production, food processing and distribution, and more.  Some of the more prominent food brands the company has in its portfolio are GardeniaCowhead, and Farmland.

QAF has been a big long-term winner in our local stock market with its shares up 128% over the last five years.

Investors who are keen to learn more about this company may want to pay attention to the nine numbers below that will provide a useful overview of the food producer’s business:

1. 10-year revenue growth rate: According to S&P Global Market Intelligence, QAF’s revenue in 2006 was S$992.0 million whereas its revenue in 2015 was S$998.3 million. In other words, top-line growth has been essentially zero for QAF in the years under study.

2. 10-year net profit growth rate: For the same timeframe as above, QAF’s net profit has compounded at 10.4% per year from S$21.5 million to S$52.5 million.

3. Operating margin in relation to peer: QAF’s operating margin for 2015 was 7.1%. For perspective, Japfa Ltd (SGX: UD2), an Indonesia-based food producer, achieved an operating margin of 7.7% in the same year.

4. The return on equity: QAF’s return on equity in 2015 was 12.5%, according to S&P Global Market Intelligence. Japfa, meanwhile, had generated a ROE of just 9.7%.

5. Gearing: QAF’s total debt to equity ratio is currently 17.4%. This signifies a relatively healthy balance sheet and also means that QAF should have the financial wherewithal to both weather through bad times as well as invest in itself for growth during good times.

6. Dividend track record: QAF has consistently paid an annual dividend in its last 10 fiscal years. The company has also maintained its dividend at S$0.05 per share from 2011 to 2015. In those years, QAF’s payout ratio (the dividend as a percentage of earnings) had averaged at 64%.

7. Market capitalisation: At its current share price of S$1.34, QAF has a market capitalisation of around S$753 million. This puts the company within the universe of small cap stocks in Singapore’s market.

8. The price-to-earnings ratio: QAF is valued at just 9.3 times trailing earnings right now. This is lower than the SPDR STI ETF’s (SGX: ES3) P/E ratio of 12.4.

9. The price-to-book ratio: The company carries a P/B ratio of 1.59 at the moment, which is higher than the SPDR STI ETF’s 1.2.

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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.