Berjaya Food: Testing Investors' Appetite?

Listing tomorrow (March 8), Berjaya Food (BFood), through its subsidiary Berjaya Roasters, is principally involved in the development and operation of the Kenny Rogers Roasters (KRR) chain of restaurants in Malaysia. All started when Berjaya Group acquired KRR in 1993, and being the exclusive franchisee in Malaysia, operating 52 outlets nationwide.

Kenny Rogers Roasters

What's in BFood mind?

• Open 8-10 outlets per annum
• Emphasizes healthy food targeting increasingly heath conscious consumers

What Analysts say?

The IPO price was set at RM0.51, and Berjaya Group will still be the largest shareholders after IPO with 70.91% shareholdings. OSK Research value BFood with a RM0.57 target price, based on 7.5x PE, which represents a 30% discount to its closest peer in Malaysia, QSR Brands due to its smaller revenue and earnings base. BFood intends to distribute up to 50% dividend payout.

Past and projected revenue. Source: OSK, Prospectus

More "food" for BFood? 

Berjaya Group does not discount the possibility of injecting its other food businesses into BFood once they turn more profitable. I believe this is just the beginning for Berjaya Group to unlock its value in food and beverages businesses. Potential businesses that may injected includes:

Related Posts:

Goodbye to BJCorp Investors

Goodbye to BJCorp’s Investors

While everyone seems keen to take part in sports betting starting English Premier League on August, prime minister suddenly surrender to political wills for NOT allowing the license last night.

The license was said to be already given to Ascot Sports Sdn Bhd “orally”, and since then, Berjaya Corp (BJCorp) had acquired 70% stake in Ascot Sports for RM 525 million. Shareholders are happy and many analysts are setting high target price for BJCorp. Due to objections from various parties on sports betting, Tan Sri Vincent Tan (BJCorp largest shareholder and Ascot Sports’ owner) surprise us for donating the entire proceeds of RM525 million to charity.

Let’s examine the issue carefully…

1. If he is so confident, why Tan Sri Vincent Tan sell its stake in Ascot Sports before officially getting the green light?
2. Why not after, when he can fetch a higher value than RM525 million?
3. In the first place, why Tan Sri Vincent Tan would like to share the pie with investors?

It is expected that BJCorp will issue a statement on Monday in relations to this issue. Hope the press conference will went through smoothly. Take care.