QAF Limited’s FY15 results came in within our expectations. Revenue was down 2% to S$998.3m due to exchange rate translation effects, particularly SGD/AUD and SGD/MYR. PATMI rose 17% to S$52.5m. These formed 97% and 106% of our full year estimates for revenue and PATMI, respectively. Excluding FX translation effects, all business segments (Bakery, Primary Production, Trading & Logistics) continued to see growth in sales, on the back of new products, higher ASP and volume sold.

For the purpose of meeting regulations, the group has entered into a conditional sale and purchase agreement to sell a 20% stake in Gardenia KL for RM90m (~S$30m) to Pardiberas Nasional Berhad (BERNAS), whom is a long-standing partner that currently owns a 30% stake. All considered, the group has maintained a final DPS of 4 S-cents, bringing total DPS to 5 S-cents, unchanged from last year. Maintain BUY with fair value estimate of S$1.27. The group has requested for a trading halt this morning.

Source: OCBC Research - 25 Feb 2016