Broker's view: Midas Frontier

Based and listed in Malaysia, fast-growing soft drinks company Fraser & Neave Berhad has captured a 90
per cent share of the fast-growing isotonic drinks market in Malaysia through brand 100Plus.  

Currently Malaysia’s largest soft drinks manufacturer/distributor, with further brands including Sarsi and Outrageous Orange, it is now rolling out more products such as iced teas, is expanding into Singapore and Indochina, and also recently signed a five-year exclusive deal to distribute Red Bull in Malaysia.

Fraser also manufacturers fresh milk, tea and ice cream, and its profits have grown from S$68 million (£33.5 million) in FY1999 to S$467 million in FY2009, a compound annual growth rate of 21 per cent a year, with assets burgeoning from S$6 billion in 1999 to S$14 billion in 2009. As such, the shares are inexpensive, trading on a p/e of 15.9, with a yield of 2.8 per cent.

For all the milk in China
Hong Kong-listed Vitasoy International Holdings is one of China’s leading producers of soya milk and tofu, with its two major brands being the Vitasoy and Vita line of drinks that include dairy milk, juices, teas, distilled water and sodas.  Supplying the likes of Starbucks Corporation, Vitasoy has recently announced that it will invest around 300 million yuan (£30.5 million) to double its production capacity in China.  

Vitasoy’s products are sold in more than 40 markets including China, with soya milk making up around 44 per cent of sales for the year ended 2010. The company has grown its earnings per share by 14.4 per cent per annum over the past five years and Midas expects this to continue. Currently trading on a p/e of 22, Vitasoy offers a yield of 3 per cent.