BJFood: Operating Income Rose

Results Update

For QE31/1/2015, BJFood's net profit dropped by 95% q-o-q but rose 7% y-o-y to RM8.6 million while revenue rose 77% q-o-q or 2-fold y-o-y to RM133 million.

Its pre-tax profit was lower compared the preceding quarter which had benefited from the recognition of the gain of RM158.6 million arising from re-measurement of the 50%-equity interest in BStarbucks previously held by the Group in accordance with the requirements of Malaysian Financial Reporting Standards 3. This was carried out after the consolidation of BStarbucks following the acquisition of the remaining 50% equity interest in BStarbucks in the previous quarter.

However, excluding the investment-related items of RM158.60 million, there was an increase in pre-tax profit from RM6.70 million (second quarter ended 31 October 2014) to RM12.63 million. The higher pre-tax profit was mainly attributed to the full effect of consolidation of BStarbucks and higher revenue due to year end festive sales, school holidays and the Christmas season.


Table: BJFood's last 8 quarterly results


Chart 1: BJFood's last 21 quarterly results (excluding the extraordinary gain of RM158.6 million recorded in QE31/10/2014)

Valuation

BJFood (closed at RM2.60 yesterday) is now trading at a PE of 26 times (based on last 4 quarters' EPS of 10.3 sen, excluding the extraordinary gain of RM158.6 million). Based on a earnings CAGR of 20%, the PEG ratio is about 1.3 times. Thus,  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 RM1.95-2.00.


Chart 2: BJFood's weekly chart as at Mar 11, 2015 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, exciting prospect & positive technical outlook, 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.