BJFood: Bottom-line soared due to one-time investment gain

Results Update

For QE31/10/2013 2014, BJFood's net profit increased increased by 26-fold q-o-q or 6-fold y-o-y to RM164 million due mainly to the recognition of the gain of RM158.6 million arising from re-measurement of the 50% equity interest in BStarbucks.

Excluding the one-time net gain of RM158.6 million, the current quarter pre-tax profit of RM6.70 million showed a y-o-y increase of RM1.64 million. The higher pre-tax profit was mainly due to the consolidation of the improved results of BStarbucks arising from more store openings and the contribution of the Brunei Starbucks operations. 

Revenue increased y-o-y due to the effect of consolidation of the newly acquired wholly-owned subsidiary, BStarbucks, as well as the contribution from the Starbucks operations in Brunei, which only commenced operation in February 2014.


Table: BJFood's last 8 quarterly results


Chart 1: BJFood's last 20 quarterly results (excluding the extraordinary gain of RM158.6 million recorded in QE31/10/2014)

Valuation

BJFood (closed at RM2.79 yesterday3) is now trading at a PE of 29 times (based on last 4 quarters' EPS of 9.6 sen, excluding the extraordinary gain of RM158.6 million). At this PE, BJFood is deemed fully valued.

Technical Outlook

BJFood is still in an uptrend line. Its immediate support is the horizontal line at RM2.60. If this support is broken, the stock's next support is at RM2.35.


Chart 3: BJFood's weekly chart as at Dec 9, 2014 (Source: Share Investor)

Conclusion

Based on good financial performance, BJFood is still a good stock to hold for long-term investment. However, it is immediate upside is likely to be limited as its valuation is fairly demanding.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, BJFood.