Fu-Wang Foods stock soars 50% in six days
Posted record revenue in FY22, yet incurred a huge loss. Reason, pricey raw materials
The share price of Fu-Wang Foods Ltd has gone up by 50% in six trading days at the Dhaka Stock Exchange (DSE) and reached Tk35.2 on Sunday.
On 2 July, its shares were trading at Tk23.5 apiece.
The premier bourse, on 6 July, sent a query letter to the company seeking explanation behind this unusual increase in share price. To the letter, the company replied that there is no undisclosed price sensitive information responsible for the share price hike.
Fu-Wang Foods manufactures breads, biscuits, noodles, snacks, mini-snacks, chocolates, energy drinks, and other food items.
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Alongside its existing products, the company had set up a new line to produce puffed rice this January.
Earlier, Minori Bangladesh, a subsidiary of the Japanese farming company Minori Co Ltd, took over Fu-Wang Foods by acquiring 7.61% of the sponsor-directors' shares last year hoping for good potential.
According to sources, after the change in management, Fu-Wang Foods has reported a record revenue of Tk110 crore in the fiscal 2021-22. But despite a record revenue, the company not only failed to make a profit, but also turned a huge loss of Tk24 crore.
The company blamed the increase in prices of raw materials fuelled by the Russia-Ukraine war for its loss in FY22.
But the company, in the first nine months of the 2022-23 fiscal year, posted a profit growth after facing a blow in FY22.
In the July to March period of FY23, the manufacturer of confectionery items made a profit of Tk1.89 crore, which was Tk1.25 crore in the same nine months of the previous fiscal.
