Farm Fresh Cambodia expansion lacks details, CIMB sees near term start-up losses

Farm Fresh, together with the Pursat Provincial Administration, Sonavith Co Ltd and Cambodia’s Alpha Group, signed a land lease agreement on Aug 5 for the Farm Fresh Pursat dairy project in Veal Veng district, Pursat Province. The site spans about 2,500 acres and will comprise a dairy farm and milk processing facility. CIMB Securities’ channel checks indicate the project could target annual fresh milk production of up to 40 million litres. The project would mark Farm Fresh’s first dairy farm outside Malaysia and Australia. CIMB Securities retained its Hold call and RM2.30 target price pending further details, with near-term re-rating potential capped by expansion costs, higher depreciation and rising input costs.