For me, I'm starting to like buying into companies I can see in my everyday life. Examples are Starhub, Singtel, SPH, Breadtalk and SingPost. This is one of my criteria nowadays before delving further into it's financial statements and technical charts. Another good example would be Aztech, of which we can see their products in Harvey Norman and Challenger. Cerebos Pacific came across as interesting to me because of their products, which I use frequently.
The main attraction to me is Cerebos' leading health supplement, BRANDS. This is a product which I have been using since I was a kid! And I swear by its effectiveness in leading me to my academic success! FYI, Brands is at its 175th anniversary in the year 2010!
Finally, a product that I used while doing my student exchange in Germany is Asian Home Gourmet. The taste is excellent, and the sauces in the packages, the thoughtfulness of having sauces for the whole course of the meal, all appealed to me.
The above are merely brands in Singapore. Cerebos Pacific has also made forays into Vietnam, China, Australia, Malaysia, Thailand, etc, and sells stuff like coffee or western sauces and gravy as well, leveraging on their experience in sauces. In addition, Cerebos Pacific is making headways in selling Brands Essence of Chicken in China, where academic success is paramount and of utmost importance to most students.
Vision of Cerebos Pacific:
To be the leading food and health supplements enterprise in the Asia Pacific region by creating value for our employees, our customers and our shareholders.
Mid Term Goal:
Expand production capability (done)
Removing barriers to growth
Long Term Goal:
Making Cerebos more immune to cyclical economic patterns and uncertainties.
The dividend given by this company has been a fixed 25 cents per share since 2005. This is made up of 6 cents dividends plus 19 cents special dividends every year. This is indeed attractive, and would do well to contribute to my dividend portfolio, although I would say this is a good company to have in the investment portfolio as well.
The nice dividend amount appears to be sustainable if what the company said is true; there still plenty of opportunities to increase market penetration in its current markets without further expansion.
This concludes my initial view on Cerebos Pacific. In Part 2, I would attempt to discuss, using my layman method, their marketing strategies, and my thoughts on their future plans. In addition, I would also take a simplified look at their financial statements, and do a discounted cash flow valuation for their intrinsic value.