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Sunday, August 23, 2009

Value Buy Cocoaland Holdings

Cocoaland Holdings Berhad, an investment holding company, engages in manufacturing and trading processed and preserved foods, fruits, and other related food stuffs primarily in Malaysia. The company also engages in the wholesale and retail of processed and preserved foods; and the manufacture of fruit juices. Its products include chocolates, cookies and wafer, nuts, candies and gummies, snacks, and soft drinks and jellies. The company is based in Kuala Lumpur, Malaysia. Cocoaland Holdings Berhad is a subsidiary of Leverage Success Sdn Bhd.
Prospects
Cocoaland Holdings Bhd has set-up a plant in Fujian province in China under a 50:50 joint venture (JV) to produce its popular Lot 100 fruit gummy products. Cocoaland is one of the few gummy manufacturers in Asia. In the JV, Cocoaland Industry Sdn Bhd, signed an agreement with China’s La Bi Xiao Xin International Co Ltd.
The JV company, Coco (Fujian) Food Industrial Co Ltd, would involve US$5 million (RM17 million) in investment and start production in August 2007. Cocoaland will be responsible for manufacturing and its partner will look into distribution and marketing. The investment is fully funded via cash. It is expected that the earnings from the China operations coming through for the 2008 financial year and subsequently, the full impact can only be felt in year 2009.
La Bi Xiao Xin is a unit of Singapore-listed China Lifestyle Food & Beverages Group Ltd. It has more than 17,000 retail outlets under the La Bi Xiao Xin brand and annual revenue of over 500 million renminbi (RM221 million). The distribution network is large and perhaps in the future,

Cocoaland may own 1% of China’s Market through the JV.


Cocoaland is at RM 1.03,has P/E of around 10 compare to the industry standard, Dividend Yield 5%. Cocoaland is expected to declare bonus issues / special dividend for its investors.

1 comment:

  1. What do you think about Oriental Food Industries Holdings Berhad? Is this company still undervalue? P/E ratio less than 10,
    first quarter result: group revenue increased 20.5%, and Group net profits increased 43.6%.

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