STOCK FOCUS OF THE DAY
Berjaya Food: Robust 2QFY18 results BUY
We believe the worst is over for Berjaya Food (BFood) with KRR’s robust SSSG and completed corporate exercise. It also benefits from a stronger MYR. We maintain our BUY recommendation and fair value of RM1.91/share. Valuations are pegged to a P/E of 25x FY19F, reflecting a 20% premium to its historical valuations. We think that it is justified as BFood has significantly enhanced earnings visibility following the disposal of KRR Indo, attractive growth off a low base and a stellar Starbucks brand.
BFood reported a 2QFY18 net profit of RM5.8mil (QoQ: 8.9%, YoY: 15.5%) bringing 1HFY18 net profit to RM11.2mil (YoY: 11.1%). It was in line with ours and consensus at 52% of both estimates respectively. Declaration of a 1.0 sen/share dividend was within our expectations.
Key highlights of BFood’s results included Starbucks’ respectable performance, growing in the mid-teens; KRR Malaysia's robust 8.7% SSSG for the quarter; recognition of KRR Indonesia contribution despite disposing of the asset on 24 Nov 2017; and Jollibean's flat earnings growth for the quarter despite 15% lower revenue.
Others :
Yinson Holdings: Ghana FPSO delivers strong earnings BUY
Building Material: To stay bullish in 2018 OVERWEIGHT
STOCKS ON RADAR
Comfort Gloves, Cuscapi, UCrest, Minetech Resources
STRATEGY: GLOBAL FX
Global Currency Outlook: Local Factors To Be Key Drivers
NEWS HIGHLIGHTS
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Bonds: RAM sees bond market gaining from green investment
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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