Food Empire

Food Empire: Reported 4Q12 net profit of USD21m (+37% yoy), exceeding estimates of US$18m. This is attributed to higher than expected gross margins which expanded by 3ppt yoy to 46.8%. A dividend of 1.2SGD¢ was declared, translating into a yield of 1.8%. DMG raise 2013-14 earnings by 18% in light of stronger growth momentum in Russia as well as higher gross margins. House rollover valuations to derive a higher TP of $0.84, pegged to 15x 2014 EPS. Maintain BUY.