Results Update
For QE31/7/2013, BJFood's net profit increased increased by 5% q-o-q or 131% y-o-y to RM5.2 million while revenue increased by 3% q-o-q or 48% y-o-y to RM36.5 million. The increased net profit was due to higher revenue which was mainly brought about by the additional restaurants operating in the current quarter.However, the true extent of the performance was muted by lower same store sales as the Muslim fasting month fell in this quarter under review (that spanned from July 2013 to early August 2013).
Table: BJFood's last 8 quarterly results
Chart 1: BJFood's last 15 quarterly results
Valuation
BJFood (closed at RM1.68 as at Sep 20, 2013) is now trading at a PE of 19.3 times (based on last 4 quarters' EPS of 8.7 sen). At this PE, BJFood is deemed fully valued.
Technical Outlook
BJFood is still in an uptrend line, with support at RM1.65 (see the daily chart, Chart 2). In addition, we can see that BJFood should have good support from the 40-week SMA line at RM1.60 (see the weekly chart, Chart 3).
Chart 2: BJFood's daily chart as at Sep 20, 2013 (Source: Quickcharts)
Chart 3: BJFood's weekly chart as at Sep 20, 2013 (Source: Quickcharts)
Conclusion
Based on improving financial performance and 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.
Looks forward BJFood to acquire others F&B outlets - Papa Johns Pizza, Wendy's and Krispy Kreme doughnut from Berjaya Corp in future.
ReplyDeleteAnyone know how soon Jolly Bean will be set up in malaysia?
ReplyDeleteHi Andres Kwan
ReplyDeleteYes, BJFood may be a F&B stock to watch. I am not sure why Jolly Bean (or, Jollibee?) will open up in Malaysia.
Anyone knows why the stock price of BJfood is sliding down so much lately?
ReplyDeleteHi Young Han Koh
ReplyDeleteBJfood's NP has been drifting lower for the past 3 quarters after chalking a high of RM7.9m in QE31/1/2013. To be fair, that was the quarter with all the festive season sales. We may see a similar jump in NP in QE31/1/2014.
At RM1.52, BJFood is now trading at a trailing PER of 17.7x (based on last 4 quarters' EPS of 8.6 sen). For a young F&B stock, this valuation is deemed fair.
Chartwise, the stock may find support at the 50-week EMA line at RM1.50-1.55. If that failed, the stock may dropped to the horizontal support at RM1.35-1.40.
I rate it a HOLD>