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From Crumbs to Cash: How Hup Seng Is Quietly Winning the Game!
Hup Seng Industries Berhad is a well-established player in the biscuits, crackers, and coffee mixes market, with its products marketed under several brand names. Over the past six years, the company has undergone significant leadership transitions and operational modernization.
Between 2019 and 2024, revenue grew at a 5% CAGR, while PAT expanded at an 8.2% CAGR. This higher profit growth was not driven by margin expansion but rather better control over fixed costs - including Selling, General & Administrative (SG&A) expenses and Depreciation & Amortization. Over this period, fixed cost margins declined from 18% in 2019 to 15% in 2024, contributing to improved profitability.
As such ROE went from 26% in 2019 to 35 % in 2024. The impact of these improvements is evident in the Fundamental Mapper, where Hup Seng ranks as one of the better-performing businesses. However, its stock price has risen over the past year, and while it is currently below its past-year high, it still carries some investment risk.
The key question is whether the company can sustain its business improvements to justify a move into the Goldmine quadrant at its current valuation. Addressing variable costs and expanding margins could significantly enhance its positioning, making this a potential opportunity if executed effectively.
As far as I can tell, Hup Seng does not have any exports to the US. So there are not likely to be impacted directly by the high tariff. Unfortunately, if the tariffs cause a global economy decline, then its business will be impacted. Your guess is as good as mine in whether we will see a global economic decline
the stupid tariffs war is impacting directly and indirectly in every stock market around the world, because it will slow down the GDP and therefore consumer spending power is reduced, therefore drive down stock which has no export to US also
