Stocks In Focus MY (Berjaya Food, IJM Corp, Sunway) – 10/12/14
BJFOOD (5196), IJM (3336), SUNWAY (5211)
Berjaya Food 2Q15 Earnings Surge On Starbucks Merger Gain
For the second quarter ended 31 October, Berjaya Food’s revenue more than doubled to RM75.3 million, mainly due to the effect of consolidation of a newly acquired subsidiary, Berjaya Starbucks Coffee Company (BStarbucks), as well as higher contributions from its Starbucks operations in Brunei.
Net profit for the quarter surged multiple-fold, from RM4.3 million to RM163.7 million, on the back of an RM158.6 million gain arising from the re-measurement of its stake in BStarbucks following the consolidation.
Excluding the one-off gain, pre-tax profit rose 32.5 percent to RM6.7 million. For the six-month period, top line jumped 63.6 percent to RM115 million, while bottom line rocketed to RM169.6 million. The group has recommended a first interim dividend of RM0.025 per share.
Significance: Moving forward, the firm notes that the second half of the financial year usually has higher sales performance as most festive seasons and school holidays fall into this period, the effect of the consolidation of BStarbucks is also expected to improve revenue and net profit for the remaining quarters.
Kenanga Positive On IJM’s India Asset Disposal
Kenanga Research said IJM Corporation’s outlook remains bright in the midst of entering a new phase of growth. The group has announced a deal to dispose of its 100 percent owned Jaipur-Mahua Tollway Private for RM295 million on Monday.
The research house said it was positively surprised with the news as it has expected the group to sell selling the highway at 2.8 times price-book value, since the group has estimated a gain of RM188 million from the disposal.
IJM’s net gearing is expected to improve after the disposal. In a separate report, BIMB Securities Research noted that there is a possibility of a special dividend in FY15 if the deal materialises by then.
Significance: Kenanga Research has an ‘Accumulate’ rating on the group, with a raised target price of RM7.66, given its deep value, backed by exciting near and long-term growth prospects.
RHB Upbeat On Sunway
RHB Research is upbeat on Sunway’s continuous effort in unlocking asset values, after the group announced its proposed disposal of Sunway Hotel Georgetown for RM74 million and Wisma Sunway for RM60 million, to Sunway REIT.
According to the announcement, the disposal will yield a net gain of RM23.4 million. The bulk of the proceeds will be retained as working capital while the rest will be used to repay bank borrowings.
The research house noted that the impact of the disposals is minimal but is still attractive from the dividend angle, including the dividend anticipated from the listing of Sunway Construction Group.
Significance: RHB Research reiterated its ‘Buy’ call on Sunway, with a target price of RM3.90 as it believes that the net gain from the disposal, albeit minimal, will nonetheless add to the dividend pool.
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BJFOOD (5196), IJM (3336), SUNWAY (5211)
Berjaya Food 2Q15 Earnings Surge On Starbucks Merger Gain
For the second quarter ended 31 October, Berjaya Food’s revenue more than doubled to RM75.3 million, mainly due to the effect of consolidation of a newly acquired subsidiary, Berjaya Starbucks Coffee Company (BStarbucks), as well as higher contributions from its Starbucks operations in Brunei.
Net profit for the quarter surged multiple-fold, from RM4.3 million to RM163.7 million, on the back of an RM158.6 million gain arising from the re-measurement of its stake in BStarbucks following the consolidation.
Excluding the one-off gain, pre-tax profit rose 32.5 percent to RM6.7 million. For the six-month period, top line jumped 63.6 percent to RM115 million, while bottom line rocketed to RM169.6 million. The group has recommended a first interim dividend of RM0.025 per share.
Significance: Moving forward, the firm notes that the second half of the financial year usually has higher sales performance as most festive seasons and school holidays fall into this period, the effect of the consolidation of BStarbucks is also expected to improve revenue and net profit for the remaining quarters.
Kenanga Positive On IJM’s India Asset Disposal
Kenanga Research said IJM Corporation’s outlook remains bright in the midst of entering a new phase of growth. The group has announced a deal to dispose of its 100 percent owned Jaipur-Mahua Tollway Private for RM295 million on Monday.
The research house said it was positively surprised with the news as it has expected the group to sell selling the highway at 2.8 times price-book value, since the group has estimated a gain of RM188 million from the disposal.
IJM’s net gearing is expected to improve after the disposal. In a separate report, BIMB Securities Research noted that there is a possibility of a special dividend in FY15 if the deal materialises by then.
Significance: Kenanga Research has an ‘Accumulate’ rating on the group, with a raised target price of RM7.66, given its deep value, backed by exciting near and long-term growth prospects.
RHB Upbeat On Sunway
RHB Research is upbeat on Sunway’s continuous effort in unlocking asset values, after the group announced its proposed disposal of Sunway Hotel Georgetown for RM74 million and Wisma Sunway for RM60 million, to Sunway REIT.
According to the announcement, the disposal will yield a net gain of RM23.4 million. The bulk of the proceeds will be retained as working capital while the rest will be used to repay bank borrowings.
The research house noted that the impact of the disposals is minimal but is still attractive from the dividend angle, including the dividend anticipated from the listing of Sunway Construction Group.
Significance: RHB Research reiterated its ‘Buy’ call on Sunway, with a target price of RM3.90 as it believes that the net gain from the disposal, albeit minimal, will nonetheless add to the dividend pool.
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