F&N's Malaysian unit, which is listed in Kuala Lumpur, on Wednesday said Coca-Cola Co will not extend a bottling agreement due to expire in January, triggering concerns the whole group could lose the rights for soft drinks such as Coke and Sprite.
A dealer at a Singapore brokerage said F&N's property portfolio had been hard hit and investors were banking on the defensive consumer beverage business in the downturn.
"Though it (the contract termination) won't have much impact, it's a disappointment," he said.
"At F&N's group level, we estimate Coke's products account for 4 percent of revenue and about 3 percent of operating profit contribution," DBS Vickers said in a report.
"While the impact seems to be relatively minor to F&N, the termination of the agreement in Malaysia does not seem to bode well for the group," it added.
By 0635 GMT, F&N was down 6.3 percent at S$2.51, underperforming the benchmark Straits Times Index <.FTSTI>, which was down 1.1 percent.
HYFLUX JUMPS ON STRONG PROFITS
Water treatment firm Hyflux rose as much as 6.6 percent on Thursday after posting a near-80 percent jump in annual net profit, but some analysts cut their price targets, citing concern over a weak industrial sector.
JPMorgan, which rates Hyflux as "overweight", said there was potential gain from its Build-Own-Transfer plants divesture, adding that a portfolio of 9 plants initially priced at S$180 million ($117.5 million) was in the pipeline.
"The price tag could be potentially revised upwards depending on the state of completion and operating levels of the plants," JPMorgan said in a research note.
But JPMorgan cut its Hyflux price target to S$2.50 from S$3.00 previously.
Credit Suisse, which rates Hyflux as "outperform", reduced its target price to S$2.39 from S$2.52, citing industrial sector weakness.
A local dealer said Hyflux's strong revenues were impressive at a time of recession.
"The water business is not high risk, except for higher gearing from time to time. But Hyflux has proven itself in the long-run without putting too much strain on the business," he said.
By 0415 GMT, Hyflux was up 6 percent at S$1.76, outperforming a 1 percent drop on the benchmark Straits Times Index.