STOCK FOCUS OF THE DAY
Berjaya Food : Something is brewing BUY
We believe Berjaya Food’s (BFood) risk factors such as a weakening MYR, poor performing stores and soft patches of SSSG have diminished. Turnaround in BFood could be capped with the sale of its non-performing assets in FY18. We maintain our BUY recommendation and fair value of RM1.77/share despite upgrading FY18 earnings as our valuations are pegged to FY19F.
Valuations are pegged to a P/E of 25x, reflecting a 20% premium to its historical valuations. We think that it is justified as BFood is on the cusp of a revival, independent of a potential restructuring exercise, attractive growth off a low base and a stellar Starbucks brand. BFood registered a 1QFY18 net profit of RM5.3mil (YoY: 6.7%). It was in line with consensus but above our expectations at 20% and 28% of estimates respectively. We lift our FY18 earnings by 13% to reflect healthier-than-expected margins. Key risks to our forecast include slower-than-expected turnaround at KRR Malaysia and impairments related to unexpected store closures.
Others :
Kimlun Corp : Lands RM215mil building job in Selangor BUY
Oil & Gas : MCM award unlikely to catalyse sector NEUTRAL
QUICK TAKES
DRB-Hicom: Geely to nominate CEO for Proton production arm HOLD
Plantation Sector : News flow for week 11 – 15 September NEUTRAL
STOCK ON RADAR
Heveaboard, Hibiscus Petroleum,Global Oriental, Green Packet
NEWS HIGHLIGHTS
Titijaya Land : Foreign investor eyes stake in Titijaya
Insurance Sector : AIA looks to sell off M’sian assets worth RM100m
Enra : To buy Aussie firm to expand downstream O&G
Globetronics : Plans to ramp up capacity
DISCLAIMER:
The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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