OFI (7107) - ORIENTAL FOOD INDUSTRIES HOLDINGS BERHAD VALUE EVALUATION
Friday, April 25, 2014
Oriental Food is a local manufacturer of confectionary and snacks. My attention is converged to the company’s snacking division line. Already known for its cheese balls which fill up the childhood for most people, its snack series come with a rather low price and guaranteed recipe. Although the snacking market is already filled up with popular international brand like Lays and Mister Potato, Oriental Food’s line market share has never deteriorated. Utilizing its position of cheap and unique recipe, it continually captures the taste and preference of fellow Malaysians. The group further extend their advantageous position by offering their products at a smaller quantity. With the already low price offered, it just get cheaper and reach extensive target groups than usual. The group has also done quite a splendid job by allowing plenty of factory visits for charitable organizations and schools. Marketing efforts are seen where the group seeks distribution channel through family carnivals by sponsorships. Capital expenditure is undergoing a rather inconsistent pattern as there is a high of annual RM14 million spending and there is zero spending on the other extreme. However, the chairman indicates that the group is focusing on innovating new products to defend their market share. As there will be large scale research and development going on, I don’t see the group’s cash reserve allows it with only RM15 million which is equivalent to only 1 year spending.
As mentioned above, the company is competing in a market where a lot of competitors are aggressively fighting for their own market share. ( Note that it’s not the word ‘increase’ I’m using, instead it’s FIGHTING) Promotion of lower prices are often held regardless of festivals or special events. Also, people’s awareness has increased towards their diet. With this trend going on, snacking business will be more difficult to survive with stricter monitoring of the food process.
Oriental Holdings Berhad 10 Years Financial Performance
The operating cash flow is growing steadily with an annual growth rate of only 4.61%. ROA and ROE has rather poor performance. With the three poor quantitative indicators, the firm has still spaces of improvements. Filtered out of my list.
Stock: OFI Code: 7107
http://valueinvestorclub.blogspot.com
Friday, April 25, 2014
Oriental Food is a local manufacturer of confectionary and snacks. My attention is converged to the company’s snacking division line. Already known for its cheese balls which fill up the childhood for most people, its snack series come with a rather low price and guaranteed recipe. Although the snacking market is already filled up with popular international brand like Lays and Mister Potato, Oriental Food’s line market share has never deteriorated. Utilizing its position of cheap and unique recipe, it continually captures the taste and preference of fellow Malaysians. The group further extend their advantageous position by offering their products at a smaller quantity. With the already low price offered, it just get cheaper and reach extensive target groups than usual. The group has also done quite a splendid job by allowing plenty of factory visits for charitable organizations and schools. Marketing efforts are seen where the group seeks distribution channel through family carnivals by sponsorships. Capital expenditure is undergoing a rather inconsistent pattern as there is a high of annual RM14 million spending and there is zero spending on the other extreme. However, the chairman indicates that the group is focusing on innovating new products to defend their market share. As there will be large scale research and development going on, I don’t see the group’s cash reserve allows it with only RM15 million which is equivalent to only 1 year spending.
As mentioned above, the company is competing in a market where a lot of competitors are aggressively fighting for their own market share. ( Note that it’s not the word ‘increase’ I’m using, instead it’s FIGHTING) Promotion of lower prices are often held regardless of festivals or special events. Also, people’s awareness has increased towards their diet. With this trend going on, snacking business will be more difficult to survive with stricter monitoring of the food process.
Oriental Holdings Berhad 10 Years Financial Performance
The operating cash flow is growing steadily with an annual growth rate of only 4.61%. ROA and ROE has rather poor performance. With the three poor quantitative indicators, the firm has still spaces of improvements. Filtered out of my list.
Stock: OFI Code: 7107
http://valueinvestorclub.blogspot.com
