Apex Frozen Foods
The Shrimp sector is seeing a severe downturn in the US🍤🍤
Apex stock has lost more than 50% in the last 5 years!😅😅
A thread🧵 on the problems of the shrimp business and the opportunities for Apex Foods
Lets Go👇
The Shrimp sector is seeing a severe downturn in the US🍤🍤
Apex stock has lost more than 50% in the last 5 years!😅😅
A thread🧵 on the problems of the shrimp business and the opportunities for Apex Foods
Lets Go👇
What is happening?
Apex Frozen Foods stock has lost about 50% value in the last 5 years!
What is happening in the business?
Let's find out👇
Apex Frozen Foods stock has lost about 50% value in the last 5 years!
What is happening in the business?
Let's find out👇
The Seafood exports:-
The Indian Seafoods sector is one of the big export opportunities in the next decade
Shrimp Industry-Highly cyclical with intense competition.
🍤India is the top exporter of Shrimp
🍤India faces stiff competition from Ecuador in the shrimp export market.
🍤Ecuador is now the largest shrimp exporter in terms of volume.
The Indian Seafoods sector is one of the big export opportunities in the next decade
Shrimp Industry-Highly cyclical with intense competition.
🍤India is the top exporter of Shrimp
🍤India faces stiff competition from Ecuador in the shrimp export market.
🍤Ecuador is now the largest shrimp exporter in terms of volume.
Business for Apex Frozen Foods:-
Apex is majorly a Shrimp player
It has two varieties of Shrimps
1. Ready to Cook
2. Ready to Eat
USA dominates the revenue with 62% coming from there.
Apex is majorly a Shrimp player
It has two varieties of Shrimps
1. Ready to Cook
2. Ready to Eat
USA dominates the revenue with 62% coming from there.
The Ready to cook product is a specialised product with very high margins and the company is focussed on increasing its proportion in the total sales
Intense competition from Ecuador:-
🍤Ecuador has cost advantages as compared to India shrimp.
🍤Ecuador has been very aggressive in marketing its product in the US
This has again led to a degrowth in the demand.
🍤Ecuador has cost advantages as compared to India shrimp.
🍤Ecuador has been very aggressive in marketing its product in the US
This has again led to a degrowth in the demand.
So how were the Q3FY24 results?
🍤Revenue fell by 36%
🍤Margins fell to 6%
🍤Slowdown in the US is pretty obvious
🍤Company is waiting for Ready to cook approval from the US/EU regulator
🍤Revenue fell by 36%
🍤Margins fell to 6%
🍤Slowdown in the US is pretty obvious
🍤Company is waiting for Ready to cook approval from the US/EU regulator
Slowdown in demand
🍤The retailers have stocked up in the US,leading to a slowdown in consumption
🍤Chinese lockdown has meant the offtake is slow.
Shrimp feed consumption which was supposed to grow at 15% will now degrow.
The outlook for next year does not look good
🍤The retailers have stocked up in the US,leading to a slowdown in consumption
🍤Chinese lockdown has meant the offtake is slow.
Shrimp feed consumption which was supposed to grow at 15% will now degrow.
The outlook for next year does not look good
Anti Dumping Duty on Ecuador Shrimp in the US
🍤US dept of Commerce is studying impositions of anti-dumping duty
🍤The decision is expected in May on the final verdict
🍤Currently Indian shrimps are subject to anti-dumping duty while Shrimps from Ecuador and Indonesia are not
🍤US dept of Commerce is studying impositions of anti-dumping duty
🍤The decision is expected in May on the final verdict
🍤Currently Indian shrimps are subject to anti-dumping duty while Shrimps from Ecuador and Indonesia are not
Future optionalities for Apex foods-
🍤Clearance of the Ready to Eat food in the United States and European Union
🍤Imposition of the Anti Dumping duty in the United States
🍤Clearance of the Ready to Eat food in the United States and European Union
🍤Imposition of the Anti Dumping duty in the United States
Valuation
Apex is available at 20x P/E multiple
It is available at 0.8x P/S
The valuation is not too expensive
Apex is available at 20x P/E multiple
It is available at 0.8x P/S
The valuation is not too expensive
Conclusion:-
The shrimp business is facing a perfect storm
🍤Slowdown in demand
🍤Intense competition from countries like Ecuador
🍤Sharp increase in raw material prices
🍤Fall in farm gate prices of shrimp
🍤Inability to pass on the price increase
All of these factors are temporary on nature.
They will ease out but the timing remains unknown.
The shrimp business is facing a perfect storm
🍤Slowdown in demand
🍤Intense competition from countries like Ecuador
🍤Sharp increase in raw material prices
🍤Fall in farm gate prices of shrimp
🍤Inability to pass on the price increase
All of these factors are temporary on nature.
They will ease out but the timing remains unknown.
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📈Personal Finance
📈Investing
📈Stock Analysis
Go to my profile and hit the bell icon🔔to always stay updated
Disclaimer:-
This is my own study
Not an investment recommendation
Please consult your own financial advisor before making any investment decisions
This is my own study
Not an investment recommendation
Please consult your own financial advisor before making any investment decisions
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