PETALING JAYA: BIMB Research expects Kawan Food Bhd
’s revenue to remain stable over the long-term with growth likely to be driven by strong demand for convenient, high-quality frozen food, particularly in key international markets.
This will be supported by ongoing product innovation and improved distribution efforts, the research house said in a note to clients.
Meanwhile, the group will continue to focus on strengthening its supply-chain resilience and broadening its product offerings.
Despite short-term external headwinds, demand remains healthy, as reflected in the group’s steady revenue from Malaysia and key export markets, the research house said.
However, BIMB Research added that Kawan Food remains cautious given ongoing global volatility from geopolitical tensions and currency fluctuations.
On the group’s results for the first quarter of this year (1Q25) , the research house said Kawan Food’s earnings came below its expectations, with core profit after tax and minority interest of RM4.3mil, which accounts for only 11% of the full-year forecast.
Revenue declined by 12.6% year-on-year to RM70.5mil, primarily due to softer demand from export markets with Europe down 25.2% and North America down 52.8%.
As a result BIMB Research cut Kawan Food’s FY25 and FY26 earnings assumption by 13% and 8% to RM34.4il and RM41.3mil, respectively, to account lower revenue from the export market.
It maintained a “buy” call on the stock with a lower target price of RM1.70 from RM2 earlier.
