Friday, June 17, 2016

BJFood: Coffee Anyone?

BJFood dropped 26 sen over the past 3 days, from RM1.83 on June 13 to RM1.57 yesterday (June 16). This followed poor result for QE30/4/2016 when its net profit dropped by 57% q-o-q or 51% y-o-y to RM3 million while revenue was mix- dropped 6% q-o-q but rose 8% y-o-y to RM139 million.

In my earlier post (here), I noted that if BJFood were to break below its 3rd fan uptrend line at RM1.80-1.85, its uptrend would be over. The next strong support - where a base may form - is at RM1.40-1.45. This is the starting point of the sharp price rally in July 2014 when BJFood announced its acquisition of the remaining 50%-stake in Barjaya Starbuck Coffee Company Sdn Bhd, the owner of the “Starbucks Coffee” chain of cafes and retail stores in Malaysia (here).

Starbuck Coffee is the main revenue & profits contributor to BJFood while the remaining businesses of Kenny Rogers Roasters & Jollibeans Food are either relatively small or new and they are loss-making. In QE30/4/2016, BJFood's bottom-line took a hit due to the weak MYR as 40% of the raw material inputs for Starbuck Coffee are denominated in USD. When our MYR recovers in the near future (hopefully soon), BJFood's earnings would rebound.

Thus, BJFood's current selldown could present a good buying opportunity. A good level to begin your accumulation is at RM1.50. Good luck!

Chart 1: BJFood's daily chart as at Jun 16, 2016 (Source:

Chart 2: BJFood's weekly chart as at Jun 16, 2016 (Source:

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.

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