DBS: Vitasoy International Holdings Ltd – Hold Target Price HK$14.40
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Vitasoy (345.HK) Proposed acquisition of 49% of Vitasoy Australia
Vitasoy (345.HK) has announced it intends to acquire the remaining 49% stake in Vitasoy Australia for an undisclosed sum, which will result in full ownership in Vitasoy Australia. If successful, the acquisition is expected to complete by end-October.
The 49% stake was previously held by National Foods, a subsidiary of Bega Foods. National Foods was previously held by Lion Dairy and Drinks, who had divested its dairy related business in 2021.
Vitasoy Australia is one of the leading plant-based producers in Australia since its incorporation in 1999, with offerings such as plant-based milk, beverages and yogurt sold in Australia, New Zealand, and overseas markets.
Australia & NZ operations previously accounted for 28%, and 9% of sales and EBIT in FY21, prior to disruptions of China operations. If materialized, we estimate an earnings upside of 3%/6% in FY23F/FY24F.
As of Mar’22, the Group holds a net debt position of HK$232m.
