Berjaya Food Berhad

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)
Research by CGSI

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)
Research by CGSI

KUALA LUMPUR: Berjaya Food Bhd’s (BFood) unit, Berjaya Food International (BFI), has inked a master franchise agreement with Paris Baguette Southeast Asia to operate Paris Baguette stores in Brunei and Thailand.

© New Straits Times Press (M) Bhd

Berjaya Food Bhd (BFood), via Berjaya Food International, has entered into a master franchise agreement to introduce and operate Paris Baguette stores in Brunei and Thailand.

KUALA LUMPUR: Berjaya Food Bhd has via Berjaya Food International entered into a master franchise agreement to introduce and operate Paris Baguette stores in Brunei and Thailand.

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)
Research by Maybank
Sell - TP RM0.30

"4QFY24: Challenges persists"

BFD’s operating challenges are likely to continue as long as geopolitical tension remains. Also, with strong competition from domestic retail coffee chain players, BStarbucks’ brand equity may have eroded over a prolonged period. We project for a net loss of MYR4m (previously profit) in FY25E. Our FY26E net profit is cut by 82% and we introduce FY27E. Due to uncertainty in earnings recovery, we switch to a book-based valuation methodology, deriving a lower TP of MYR0.30 (-5sen), using 1.3x CY25E P/BV peg (-1SD to mean; vs. 11x CY25E PER previously). SELL.

Analyst:
Jade Tam
jade.tam@maybank-ib.com

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)
Research by HLIB
Sell - TP RM0.20

"Still in red"

BFood’s chalked in 4QFY24 LATAMI -RM27.7m (3QFY24: -RM29.8m; 4QFY23: RM17.3m) which brought FY24’s sum to -RM81.0m (vs FY23: RM103.4m). The results matched our estimates but missed consensus expectations. Top-line was down by -6% QoQ; -52% YoY on the back of the Starbucks boycott that has been ongoing since Oct-23 due to Israel-Gaza war. With the tough business condition, the group has decided to take a pause on business expansion which resulted to no new stores opened for the quarter. FY24 registered a total of 408 Starbucks stores with three stores permanently closed in the quarter. The group also decided to temporarily close 25 inactive stores. We opine that sales will take time normalise considering the still intense Israel-Gaza conflict that is unfortunately seeing no signs of abating. Reiterate SELL with lower TP of RM0.20 based on 16x PE of FY25 EPS.

Analyst:
Syifaa’ Mahsuri Ismail
syifaa@hlib.hongleong.com.my

Malaysia’s Coffee Showdown

The Malaysian coffee market is heating up, especially with the potential entry of Luckin Coffee through a partnership with $BJFOOD / 5196 (BERJAYA FOOD BERHAD), and ZUS Coffee secured RM250 million in private equity funding for expansion. The competition is growing fierce.

According to data from The Edge, ZUS Coffee currently has the most outlets and a profit margin of 4.9%. Starbucks Malaysia, operated by Berjaya Food, follows with 408 outlets and a higher profit margin of 11.8%. Alongside these key players, the market is crowded with familiar names like OldTown, CBTL, Bask Bear, HWC, San Francisco Coffee, Kenangan Coffee, Dome Cafe, Costa, and Oriental Kopi. It's worth noting that some of these brands, like OldTown and Oriental Kopi, are not strictly coffee-focused; they also serve a variety of foods, attracting customers for more than just coffee.

However, it's important to acknowledge that several of these brands are currently operating at a loss, including CBTL, Bask Bear, HWC, Kenangan Coffee, San Francisco Coffee, and Costa. This highlights the highly competitive nature of the market, where profit margins are thin, and even major brands struggle to stay profitable. With the anticipated entry of Luckin Coffee, the competition is expected to intensify further.

Notably, this overview doesn't even cover all the coffee chains in Malaysia, such as Cafe Amazon (Thailand), Cotti Coffee (China), and Cong Ca Phe (Vietnam)—all prominent brands in their respective countries that have already entered the Malaysian market. The outlook suggests that competition will only become more intense in the near future.

$BJFOOD / 5196 (BERJAYA FOOD BERHAD): The Potential Operator of Luckin Coffee in Malaysia?

Chinese media reports indicate that Luckin Coffee, a rapidly growing coffee chain, plans to embark on a large-scale international expansion between the fourth quarter of 2024 and the first quarter of 2025, with a focus on Southeast Asia and the U.S. markets. Reportedly, the group has approached $BJFOOD / 5196 (BERJAYA FOOD BERHAD), the Malaysian franchisee of Starbucks, to explore the possibility of forming a joint venture.

Given Berjaya Food's extensive experience in operating coffee chains, this move isn't entirely surprising. The company currently runs Starbucks Malaysia, which has seen significant expansion, although recent boycott waves have led to some store closures and financial losses. Some skeptics argue that since Luckin Coffee is a direct competitor to Starbucks, Berjaya Food might not secure the franchise. However, this isn't necessarily the case—Jollibean Foods recently announced plans to challenge Starbucks by acquiring a 70% stake in South Korea's Compose Coffee. Interestingly, Jollibean Malaysia is owned by Berjaya Food, which contradicts the notion that being a competitor in one market precludes franchise opportunities in another.

Here are some reasons why Berjaya Food should consider securing the Luckin Coffee franchise:

- Expanding Market Share: Starbucks Malaysia once dominated the coffee chain market, but recent store closures have allowed ZUS Coffee to surpass it in terms of the number of outlets. This decline is attributed to several factors, including boycott waves, shifting consumer behavior post-pandemic, and premium pricing.

- Covering Mid to High-End Coffee Segments: The premium pricing of Starbucks has driven some customers to opt for more affordable alternatives like ZUS Coffee. By bringing Luckin Coffee into its portfolio, Berjaya Food could appeal to a broader customer base. Luckin’s pricing aligns closely with ZUS, allowing Berjaya Food to compete more effectively in the mid-range segment with Luckin, while Starbucks continues to target the high-end market.

- Potential for Profit Recovery: The boycott waves have pushed Berjaya Food into a loss-making situation, and it’s unlikely that geopolitical tensions will ease anytime soon. Therefore, the company needs to diversify its revenue streams to return to profitability. Luckin Coffee presents a promising opportunity. Given that Starbucks is the largest revenue and profit contributor to Berjaya Food, the company’s extensive experience and resources could help create synergies between its subsidiaries, potentially revitalizing its financial performance.

PETALING JAYA: Berjaya Food International (BFI), the international arm of Berjaya Food Bhd (BFood) has been granted the rights to operate Starbucks stores in Iceland, Denmark and Finland.

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)

PETALING JAYA: Berjaya Food International (BFI), the international arm under Berjaya Food Bhd (BFood) has been granted the rights to operate its Starbucks stores in Iceland, Denmark and Finland.

BFood Obtains Rights to Operate Starbucks in Three Nordic Countries

Berjaya Food International (BFI), the international arm under Berjaya Food Bhd (BFood) has been granted the rights to operate its Starbucks stores in Iceland, Denmark and Finland.
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In a statement, BFood said this strategic move marks the first entry of a Malaysian public-listed food and beverage (F&B) company into the heart of the Nordic coffee scene, with a focus on local hiring and sourcing, highlighting BFood’s dedication to spreading its culinary and operational expertise and elevating F&B experiences on a global scale.

BFI’s vision is to blend Starbucks iconic standards of quality, innovation, and hospitality with its own brand of culinary and operational excellence, promising the renowned unparalleled Starbucks Experience to Nordic coffee enthusiasts.
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BFood chief executive officer Datuk Sydney Quays said: “We are thrilled to announce our new venture of opening Starbucks Coffee stores in the Nordic region.
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“We are excited to bring our expertise and passion for excellence to the vibrant Nordic coffee culture, introducing warm Malaysian hospitality and promising the exceptional Starbucks ‘third place’ experience cherished worldwide."
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Meanwhile, Starbucks Europe, Middle East and Africa president Duncan Moir said he was pleased to expand its presence in the Nordic markets alongside its trusted and long-term business partner, BFood.
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“The company is committed to maintaining the exceptional Starbucks standards of quality, warmth, and hospitality that customers in the region have come to know.
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“As BFI assumes stewardship of Starbucks stores in Iceland, Denmark and Finland, it paves the way for a new era of innovation and growth in the Nordic coffee landscape.”
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The brands under BFood’s umbrella includes Starbucks Coffee in Malaysia and Brunei, Paris Baguette Malaysia and the Philippines, Kenny Rogers Roasters in Malaysia, Jollibean in Singapore and the vegan tex-mex inspired restaurant, Sala.
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Currently there are more than 400 Starbucks stores across Malaysia and Brunei, five Paris Baguette in Malaysia, 70 Kenny Rogers Roasters in Malaysia, 34 Jollibean outlets in Singapore and seven Sala stores in Malaysia.

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)

Source: https://cutt.ly/HexgFr2F
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Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - JUARA SEJATI SDN BHD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - BERJAYA GROUP BERHAD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - BERJAYA CORPORATION BERHAD

KUALA LUMPUR: Berjaya Food Berhad (BFood), which continues to face challenges with its Malaysian Starbucks franchise, is expanding its food and beverage (F&B) business by introducing the South Korean bakery café, Paris Baguette, to Brunei.

© New Straits Times Press (M) Bhd

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)
Research by Maybank
Sell – TP RM0.35

“Not out of the woods yet"

Operating challenges continue to plague BFD. A meaningful recovery may take longer than expected with ongoing geopolitical tension and continued erosion of the Starbucks brand over time. Our projected FY24E net loss is increased to MYR61m and FY25E-FY26E earnings estimates lowered by 8%-22%. Maintain SELL with a lower TP of MYR0.35 (based on normalised 11x CY25E PER, mean - unchanged).

Analyst:
Jade Tam
jade.tam@maybank-ib.com

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)
Research by HLIB
Sell (Maintain) – TP RM0.30

“Still bleeding"

BFood’s continued bleeding with 3QFY24 LATAMI of -RM29.8m (2QFY24: - RM42.6m; 3QFY23: RM15.9m) which brought 9MFY24 sum to -RM53.3m (9MFY23: RM86.1m). Top-line was down by -24% QoQ; -48% YoY on the back of the Starbucks boycott that’s been ongoing since Oct 2023 due to Israel-Gaza conflict. With the tough business condition, the group has decided to take a pause on business expansion which resulted to no new stores opened for the quarter. We opine that situation will be challenging for BFood with the unfavourable forex and the hampering demand from the boycott. We cut our FY24 forecast to losses of -RM81.2m and our FY25/26 forecast by -58%/-53% respectively to account for the deviations above. After earnings adjustment and rolling forward our valuation year to FY25 (from FY24) our TP decreases to RM0.30 (from RM0.38) based on 16x PE multiple. Reiterate SELL.

Analyst:
Syifaa’ Mahsuri Ismail
syifaa@hlib.hongleong.com.my

$BJFOOD / 5196 (BERJAYA FOOD BERHAD)
Research by CGS
Add (no change) – TP RM1.00

“Boycott losses drag on in 3QFY6/24"

■ BFD’s 9MFY6/24 core net loss of RM41.3m was a miss vs. our FY24F core profit estimate of RM40.1m and consensus core loss estimate of RM34.5m.
■ The ongoing boycott of Starbucks continues to drag on revenues. We believe EBITDA margin held steady qoq due to lower promotional activities.
■ Reiterate Add, with unchanged GGM-based TP of RM1.00. We believe BFD’s sales and net profit should rebound once the Middle East hostilities end.

Analysts:
LEW Cheng Wei
chengwei.lew@cgsi.com
Prem JEARAJASINGAM
prem.jearajasingam@cgsi.com

KUALA LUMPUR: Berjaya Food Bhd (BFood) reported a net loss of RM29.76 million in the third quarter (Q3) ended March 31, 2024 from a net profit of RM15.94 a year ago.

© New Straits Times Press (M) Bhd

KUALA LUMPUR: Berjaya Food Bhd (BFood), which posed a net loss of RM29.8mil in the third quarter ended March 31 (3Q24), expects a gradual improvement in its operating performance.

KUALA LUMPUR: Berjaya Food Bhd (BFood), which posed a net loss of RM29.8mil in the third quarter ended March 31 (3Q24), expects a gradual improvement in its operating performance.

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

OTHERSPress Release on the third quarter results ended 31 March 2024

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - BERJAYA CORPORATION BERHAD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - JUARA SEJATI SDN BHD