07 March 2011

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:

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