KUALA LUMPUR (Feb 11): Berjaya Food Bhd jumped as much as 72 sen or 30% to a more than seven-year high of RM3.12 on Friday morning (Feb 11) after the group’s net profit for the second quarter ended Dec 31, 2021 (2QFY22) surprised on the upside.
At 10.22am, the counter stood at RM3.11, still up 71 sen or 29.58%, with 3.75 million shares traded so far.
Analysts on Friday upgraded their earnings forecasts for Berjaya Food for the financial year ending June 30, 2022 (FY22) to FY24 after its 2QFY22 net profit beat expectations.
Maybank Investment Bank research analyst Jade Tam said in a note that the quarterly results were above her and consensus expectations, reflecting 103%/94% of respective full-year earnings estimates.
The earnings surprise, according to her, was mainly due to higher-than-expected sales volume of the Starbucks outlets and an earnings turnaround for Kenny Rogers Roasters (KRR).
“Our FY22/FY23/FY24 earnings estimates are raised by 76%/48%/42% after imputing higher earnings before interest and tax (EBIT) margins for KRR and Starbucks,” she said.
While Berjaya Food’s outlook remains positive, she expects its earnings to be lower for the second half ending June 30, 2022 (2HFY22) as average consumer spending normalises post Covid-19.
She maintained her "buy" call on Berjaya Food and raised her target price (TP) to RM3.30 from RM2.60.
Meanwhile, Hong Leong Investment Bank analyst Syifaa Mahsuri Ismail said that Berjaya Food’s 2QFY22 core profit after tax and minority interests (PATAMI) of RM38.9 million brought the 1HFY22 sum to RM50.5 million, exceeding her and consensus expectations, accounting for 98% and 88% respectively.
The outperformance, according to her, was due to better-than-expected sales and a margin improvement due to a favourable sales mix.
“Its top line remained robust, thanks to sustained demand during the festive season, coupled with the easing of interstate and overseas travel since mid-October 2021,” she said.
She raised her FY22/23/24 forecasts for Berjaya Food by 39%/36%/31% to account for higher sales volumes and better cost control.
“We are still positive on Starbucks, which continued to grow via new outlet openings, with higher sales from active promotions and continual innovative products.
“Additionally, improved mobility with resumption of domestic tourism should bode well for KRR that relies heavily on dine-in sales,” she said.
She reiterated her "buy" call on Berjaya Food and revised up her TP to RM3.80 from RM2.69.
AmInvestment Bank, on the other hand, also said that Berjaya Food’s 2QFY22 net profit of RM38.9 million was above the house and consensus expectations.
“Its 1HFY22 net profit of RM50.5 million (+135% year-on-year) made up 100% and 88% of our and consensus expectations respectively,” it said.
According to the research house, the positive variance was mainly attributed to pent-up demand following the easing of movement restrictions, benefiting the Starbucks and KRR operations.
“Post results, we have increased our earnings forecasts for FY22 to FY24 by 72%, 46% and 40% respectively after imputing a more bullish sales assumption due to return of footfall from the reopening of the economy,” it said.
It also said the company’s future earnings growth will be supported by the opening of new Starbucks outlets and the turning around of KRR through the relocation of its stores and revamp of its product offerings.
The research house maintained its "buy" call on Berjaya Food and upgraded its TP to RM3.30 from RM2.23.