CEO was on The Edge a week ago: This is the affected paragraph: http://www.theedgemarkets.com/my/article/‘refined-sugar-price-rise-30’

"Cocoaland Holdings Bhd executive director Lau Kee Von told The Edge Financial Daily that an increase in sugar price will have an impact on sugar-related food manufacturers, but it may not be significant for Cocoaland as the company’s pricing is based on international sugar prices.

Lau said major food exporters like Cocoaland have been trading sugar based on international prices instead of the government-controlled price.

He said companies that buy sugar based on the government-controlled price are mostly for local consumption, and they normally comprise small and medium enterprises. (SMEs).

Lau also noted that unlike most commodities, which saw their prices trending down, the raw sugar price has gone up this year. However, he said it is difficult to say whether the move by the government to raise the price now is justified."

Though Cocoland has made very good progress developing its export markets over the years, the slowdown in global trade has made itself felt even in the resilient snacks market. The demand slowdown in China is directly affecting demand for all sorts of Malaysian exports, ranging from electronic parts to palm oil. Consequently, export sales at Cocoloand are likely to remain soft for a few quarters. There are still a few pockets of export growth, but odds are that total export growth will be subdued. Like any well run company, Cocoaland is not simply sitting on its hands. Local sales grew 12% YTD 10 2016 vs YTD 1C) 2015 - an impressive achievement, especially when compared with the results of many other companies which have recently reported. In addition, Cocoaland has been making steady progress in Singapore, which is now a lop five' export market.
Cocoaland has plans to build an additional factory in Rawang, bringing the total number of factories to seven. This new factory will come on line in 2018. Also, Cocoaland will invest another MYR 5-10 mn in packing machines to increase production capacity. Meanwhile, Cocoaland has been making impressive progress selling its 'own brand' products in China/HK and the Middle East. YTD 10 2016 own brand sales accounted for about 64% of export sales, up from 54% YTD 1C) 2015. Cocoaland's management has made commendable progress in growing new markets under very challenging conditions whilst maintaining very respectable margins.
Looking ahead, we expect sales growth rates to range between 0-3% pa as the outlook for growth in Asia and elsewhere is softening. Investors should expect more bumps ahead, but any short term weakness in the share price may be prove a useful buying opportunity. USDMYR rates appear to be softening again, and thus exports may perk up a bit. Cocoaland has been fairly successful in growing its overseas sales as shown by the table below. This is quite encouraging for the medium and long term as the company's export market is potentially many times the size of its domestic market. There are very few 'home grown' companies in Malaysia that achieved the record of consistent export success shown below.

Ah Ha, doesn't make sense. This was the research report just a few months ago.

YTD 10 FY16 local sales value increased 12%. YTD 1Q FY16 operating margins came in at 16.5% vs 15.7% in YTD 10 2015. We expect operating margins of 14-18% to prevail over the next several quarters. Cocoaland has been taking steps to raise margins and is making good progress under very chal-lenging trading conditions. Exports account for about 52.5% of Cocoaland sales currently; however China demand is visibly slowing, so we have guided our sales forecast a bit lower. The strong USD, and the shift to own brand products have been beneficial for margins. See page five.
INVESTMENT RISKS
Risks to our recommendation and target price include: i) rising trends in material costs, ii) an increase in the general level of interest rates, and iii) a sharp slowdown in the general level of economic activity in Malaysia or in the economies of the company's major 'own brand' export markets -China/HK and the Middle East. See page five.
RECOMMENDATION
Major Shareholders (%)
Leverage Success Sdn Bhd 38 0
Fraser & Neave Holdings Bhd 27.2
Tan Booi Charn 2.6
FTSE-BURSA INDEX MEMBERSHIP
FBMKLCI 70 R3M I3A R3M HU RAH
No No Yes No
REPORT INDEX
We maintain our BUY recommendation on Cocoaland Holdings Bhd, but reduce our fair value estimate slightly to MYR 2.60. It is possible that the share price will surprise on the upside; sales growth and capacity utili-sation may accelerate more quickly than we expect. Cocoaland has very little debt on the balance sheet as well as plenty of cash.
Cocoaland has a clean balance sheet and a proven record of growing export sales (see page 5). Own brand exports are growing very strongly; and own brand margins are higher than OEM margins, implying more upside to profits. China/HK remains in the top spot as the company's largest export market, followed by Saudi Arabia in importance. Mean-while, management has been very diligent in developing the local market. Local sales rose about 12% YTD 10 2016 vs 10 YTD 2015.
COMPANY PROFILE
Cocoaland Holdings Bhd is ranked approximately in the middle of the thirty listed companies in the Malaysian snack food industry. The com-pany is one of the few home grown Malaysian consumer firms that have successfully penetrated regional markets. Cocoaland Holding's pred-ecessor company, MFESB, was formed in 1980. This company and others were consolidated and converted to a public limited company in 2000 under the name Cocoaland Holdings Bhd, prior to listing in 2005.