KUALA LUMPUR (Aug 15): Abrdn plc (formerly known as Aberdeen Asset Management plc) has emerged as Farm Fresh Bhd’s substantial shareholder after the purchase of 93.84 million shares or a 5.013% stake.

Abrdn is the fifth largest shareholder in the home-based dairy company.

The transaction price of the block of shares on Aug 10 was not disclosed in Farm Fresh’s bourse filing. However, based on the closing price of RM1.19 on Aug 10, the share purchases would have cost Abrdn RM111.67 million.

Farm Fresh's share price hit an all-time of low RM1.05 on July 12 amid supply concerns then triggered by news that Australia-listed Bega Group warned that it could be facing a non-cash impairment of between A$180 million (RM559.5 million) and A$280 million due to a decline in milk production volumes and rising dairy ingredient prices.

The raised concerns that Farm Fresh would be hit by tight supply of ingredients and higher input costs. 

Farm Fresh, however, explained that its exposure to falling milk production is not large in Australia. The company estimates that roughly 14% of its milk ingredients will be sourced from third-party farmers in Australia in the current financial year ending March 31, 2024 (FY2024).

Farm Fresh has fallen 26% year-to-date. The stock closed at RM1.20 on Tuesday (Aug 15), valuing the dairy group at RM2.25 billion.

Currently, four analysts are recommending the stock, while six have a "hold" call on it, according to Bloomberg, with a 12-month target price of RM1.48, Bloomberg data showed. The highest target price is RM1.70 by TA Securities.

Rainforest Capital Sdn Bhd is the largest shareholder of Farm Fresh with a 30.5% stake, followed by FarmChoice Foods Sdn Bhd with 12.43%. Farm Fresh co-founder and managing director Loi Tuan Ee, and his family are shareholders of both these companies, along with others.

Meanwhile, Agrifood Resources Holdings Sdn Bhd controls an 11.71% stake in Farm Fresh while the Employees Provident Fund holds an 8.63% stake.