Results Update
For QE31/1/2019, BJFood reported a net profit of RM9.0 million as
compared to a net loss of RM11 million incurred in the same quarter last
year. The net profit was 28% higher than the net profit reported in the
immediate preceding quarter (QE31/10/2018). Revenue rose 8% q-o-q or
10% y-o-y to RM181 million.
Revenue rose q-o-q mainly due to the calendar year end festive promotions, school holidays and the Christmas season during the third quarter, which contributed positively to the higher profit from operations and pre-tax profit for the quarter under review.
Table: BJFood's last 8 quarterly results
If we exclude the extraordinary gain of RM158.6 million recognized in
QE31/10/2014, the improved performance in the last quarter became quite
clear. This gain was from the recognition of the gain arising from
re-measurement of the 50% equity interest in BStarbucks.
Graph: BJFood's last 37 quarterly results
Valuation
BJFood (closed at RM1.60 at end of morning session) is now trading at a PE of 30 times (based on last 4 quarters' EPS of 5.25 sen. At this PER, BJFood is deemed overvalued.
Technical Outlook
BJFood may have broken above its downtrend line, RR at RM1.55.
Valuation
BJFood (closed at RM1.60 at end of morning session) is now trading at a PE of 30 times (based on last 4 quarters' EPS of 5.25 sen. At this PER, BJFood is deemed overvalued.
Technical Outlook
BJFood may have broken above its downtrend line, RR at RM1.55.
Chart: BJFood's weekly chart as at Mar 15, 2019_2.50 (Source: Malaysiastock.biz)
Conclusion
Based on improved financial performance and mildly positive technical outlook, I revise BJFood's rating to a HOLD. Upside maybe limited due to demanding valuation.
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