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- Asia Ingredients Group (UPCOM: AIG), which was founded in 2001 and transitioned into a joint-stock company in 2017, is a holding company with a primary focus on two core segments: (1) distribution, encompassing distribution of ingredients, innovative lab solutions services, and F&B supply chain management; and (2) B2B manufacturing, including ingredient production and OEM for F&B brands. As of 2023, AIG held a food ingredient distribution market share of 12%, per the company’s estimate.
- In 2020-2023, AIG posted a 22% revenue CAGR and a 16% NPAT-MI CAGR, driven by the company’s distribution business following a positive spillover effect of global supply chain disruptions and a surge in terms of packaged food demand during the pandemic period in Vietnam. As packaged food demand normalized after the pandemic in parallel with an economic slowdown in 2023 and uncertainties that continued into 2024, AIG’s sales growth declined 8% YoY in 2023 and modestly grew 3% YoY in 9M 2024.
- AIG is the main supplier for key F&B manufacturers in Vietnam, such as Masan, Vinamilk, and TH, due to (1) its longstanding footprint in Vietnam’s ingredient market and (2) competitive prices and quality, especially for specialty ingredients. Despite a fiercely competitive landscape, AIG aims to become a regional player offering well-rounded solutions and growing both organically and via acquisitions.
- We think AIG’s current valuation is attractive as the stock is currently trading at a TTM P/E of 9.9x, a 48% discount to the five-year median TTM P/E of 19.2x of its peers in ingredient distribution and food processing (see page 18).
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