Fashion
However, the research house had on Thursday reduced its target price from RM3.27 to RM2.35. This was based on an unchanged 23.7 times target price-to-earnings which is a 30% premium over its peer average.
It said on Thursday that BFood’s 3QFY16 revenue rose 10.3% on-year to RM147.3mil but core net profit fell 14.4% on-year to RM7.4mil.
This brought BFood’s 9MFY16 core earnings to RM19.7mil (+0.3% on-year), with revenue surging 67.1% on-year to RM415.1mil.
“Nevertheless, this was below our and consensus expectations, making up only 48% and 57% of full-year estimates, mainly on the back of the weaker-than-expected performance from its Indonesian and Singaporean operations,” it said.
CIMB Research said there was positive same store sales growth (SSSG) of 4.4% on-year for Starbucks in 9MFY16.
BFood’s 9MFY16 revenue growth was mainly fuelled by: 1) the full consolidation impact from the remaining 50% of Berjaya Starbucks since September 2014, 2) stronger SSSG at Starbucks, and 3) new Starbucks stores (+13 stores on-year).
While Malaysia’s revenue jumped 81.5% on-year mainly due to the consolidation of the Starbucks franchise, revenues from Indonesia and Singapore weakened by 6.3% and 2.3% on-year, respectively.
Starbucks recorded SSSG of 4.4% on-year, while KRR Malaysia and Indonesia saw SSSG drop 16.5% and 9.5% on-year in 9MFY16, respectively.
Meanwhile, Singapore’s Jollibean business also saw weak SSSG of -5.5% on-year.
Indonesian operations remained in the red while its Singapore operations recorded a loss of RM500,0000 versus a profit of RM600,000 in 9MFY15.
BFood also incurred higher financing costs of RM9.5mil (due to the acquisition of Starbucks) and higher effective tax rates, which led to flattish core earnings growth.
“We cut our FY16-18 earnings forecasts by 34%-46% to reflect slower performance from KRR in Indonesia and Malaysia and to take into account the higher effective tax rates,” CIMB Research added.
