Fraser and Neave

[bluechipstamp]

My take, buy orchard parade.

Why do u think Pepsi (YHS) will gain from this?

I would think that F&N has more to lose than KO. In many eateries (say McDonalds), it's often a case of if you want to offer customers COKE, then u need to include these other drinks from the same distributor, & exclude others. F&N does not have that kind of influence. I'm prepared to see McDonalds replacing Ice Mountain/Seasons Green Tea.

[winston]

Beverage and property conglomerate Fraser and Neave (F&N) said it will end an agreement that allows the Coca Cola Company to distribute F&N branded soft drinks in Singapore.

The announcement comes a day after F&N's Malaysian arm Fraser & Neave Bhd said it will lose the rights to bottle and distribute Coca Cola products in Malaysia next year.

F&N's popular brands include 100Plus isotonic drinks and Seasons flavoured teas

[ichew]

I'm prepared to see McDonalds replacing Ice Mountain/Seasons Green Tea.

so we may now see Ice Mountain/Seasons Green Tea in KFC, Pizza Hut?
havent been to these fastfoods for a long time ... but tot i rem KFC+PizzaHut serves Pepsi so i assume no F&N pdts there

[shaun]

Pizza hut is owned by Pepsi.

I'm prepared to see McDonalds replacing Ice Mountain/Seasons Green Tea.

so we may now see Ice Mountain/Seasons Green Tea in KFC, Pizza Hut?
havent been to these fastfoods for a long time ... but tot i rem KFC+PizzaHut serves Pepsi so i assume no F&N pdts there

[winston]

From DBS:-

We like F&N, which is now looking attractive relative to other property plays. F&N currently remains at 15cts (or 5.5%) below the March 26 high of $2.70, even as the FTSE Real Estate Holding & Development Index (FTSE RE EST H&D) rose 19.7% during the same period. The reason for F&N’s underperformance is because of it’s exposure to Frasers Commercial Trust (FCOT).

But even assuming that F&N’s approximate S$180mil exposure to FCOT is completely written off, the impact is only about 13cts/share of book value. If we look at the fact that F&N has fallen 15cts since March 26 and that FTSE RE EST H&D Index has risen nearly 20% in the same period, F&N has more than factored in its exposure in FCOT.

We believe that the stock should ‘narrow-down’ its relative underperformance with the other residential property stocks. Technically, we F&N has hit a low and reversed up from $2.39 yesterday. We see the stock
rising above its March 26 high of $2.70 and heading for $3. The 200-day EMA is at $3.19; January’s high is at $3.42.

[winston]

Not vested. From Kim Eng:-

Fraser & Neave – Company update (Gregory Yap 64321450)
Previous day closing price: $3.91
Recommendation: Hold (previous: Hold)
Target price: $4.14 (previous: $3.50)

Things are finally going in the right right
With a bit of luck and sacrifice, the sky is finally clearing up for F&N. It has been able to move most of its
unsold property inventory in Singapore but only after lowering prices and margins. FCOT has resolved its
funding needs without diluting unitholders but it did require a sacrifice by F&N. Finally, F&N has bought
more time to build its own-brand F&B business after wrangling a time extension from Coke.

Likely to landbank again soon
F&N has moved 88% of its projects under development in Singapore, following a resurgence in the primary
market. F&N has about 1,000 units left in its landbank and it is likely to start buying land soon, given its
policy of keeping 2,000 units in stock for redevelopment. Balance sheet headroom should come from
renewed cashflow momentum, while the FCOT recapitalisation has removed the overhang.

FCOT overhang resolved
FCOT has also proposed a plan to resolve its funding needs without immediately and substantially diluting
unitholders but it did require a sacrifice by F&N via the injection of Alexandra Technopark into FCOT at a
yield-accretive price and the guarantee of a rental income stream for 5 years in order for FCOT to obtain
banking facilities.

Bought more time to wean F&B off Coke
Finally, F&N has bought more time to strengthen its own-brand F&B business after Coke agreed to delay
the termination of mutual bottling arrangements by 20 months from Jan 2010 to Sep 2011. While the
removal of geographic and category restrictions could be exciting, F&N does not have the home ground
advantage in other SEA markets, and Coke will also be able to compete with F&N.

Share price has priced in positive developments
At the current share price, F&N is trading close to our RNAV of $4.14, which has been raised from $3.78 following the recent improvement in local property sales and our assumption of lower construction costs going forward, which will boost property development surplus. We reckon the stock has already priced in
recent positive developments and maintain our HOLD call.

[winston]

Fraser and Neave: Sells China property unit for S$201m. Fraser and Neave (F&N) has sold its Hong Kongincorporated Metro Charm Holdings – a unit that is developing a hotel and residential villas in China – for S$201m.

F&N said the sale is in line with its strategic focus in China.

( So what is the strategic focus ? Get out of China while you can ? )

The book value of the unit sold is S$128m. The sale is not expected to impact the Group’s NTA materially in the current financial year. (Source: Business Times)

[Aspellian]

But F&N has quite a few china ventures which isnt doing too well. including YHS china beverage manufacturing - think has been loss-making for upteempth years (different taste-buds etc)

certain spore management has found the right formula in doing biz in china but many others have struggle despite the "bigger"but much tougher market.

[winston]

Ha Ha ... In Cantonese, we say " nice to see, not nice to eat "..

[winston]

Not vested. From DBS:-

F&N has $2.1bn of property sales locked in till 2011; TP raised to S$4.80.

DBS Research expects F&N’s full year results on 12 Nov to be within estimates (S$335m, -19% yoy) on earlier write-offs.

The Group has S$2.1bn unrecognized revenue from property development projects sold in Singapore, supporting topline till 2011/12.

For its F&B segment, the group target to double non-beer F&B profit in next 5 years. ( Double in 5 years ? How ? Increase in population ? )

Reiterate Buy, TP: S$4.80 (Prev S$ 4.52).