Five long months! That is one long wait for a return from hibernation. Even bears come out of hibernation in a shorter time.
BJR was listed on the Bursa on 16 August 2010.It was not a fancied stock as its valuation was too rich when compared to Parkson. How the Securities Commission could have accepted such rich valuation is anybody's guess!
Prior to its listing, analysts gave it the Nero thumbs down almost immediately. Some analysts had valued BJR at only 51 sen, based on 14 times FY11 EPS, in line with their sector retail price-to-earnings ratio (PER) of 14 times.
Lo and Behold! True to their doomsday forecast, BJR managed to open just 2 sen above the 50 sen IPO level. From then on it spin into a depression and went all the way down to 'Hole-land'. If I am not wrong, it went as low as limbo rock 36 sen. That was about five months back!
BJR operates the 7-Eleven chain of convenience stores while Singer markets and sells consumer durables such as house-hold white goods via the brand name,Singer and also motorbikes on an installment basis.
In its listing prospectus, BJR has achieved revenue of RM418.9 million and pre-tax profit of RM9.99 million for its second quarter ended June 30, 2010.
As the group has only completed the business combination on June 14, 2010, there are no consolidated results available for comparison, BJR said one of its filings to Bursa Malaysia.
However, based on the proforma aggregate results of the subsidiary companies, 7-Eleven Malaysia Sdn Bhd and Singer (Malaysia) Sdn Bhd, the combined revenue and pre-tax profit for the previous year's second quarter ended June 30, 2009, were RM363.7 million and RM11.44 million respectively.
The increase in revenue was mainly due to the improved sales of motorcycles and electrical products by Singer Malaysia and opening of new convenience stores and improved average day sales per store by 7-Eleven, BJR said.
The lower pre-tax profit was mainly attributed to higher store maintenance and staff costs as well as higher operating expenditure incurred.
Similarly, based on the proforma aggregate results of its subsidiary companies for the earlier corresponding period, the group reported an increase in revenue of 14 per cent to RM834.7 million for the six months ended June 30, 2010, from RM731.7 million previously.
Pre-tax profit also increased but by a higher rate of 41 per cent from RM18.6 million to RM26.3 million this year.
So what is BJR's plans for 7-11 to expand its market shares and profitability after listing?
Among its plans are the expansion of its 7-Eleven franchise, offering new premium fresh F&B items and expanding its distribution network by opening yet another 150 new outlets in 2010. On top of that, it will open a new logistics center to maximize efficient receiving, processing and distribution of goods.
As for Singer, the current plans include the modernization and refurbishment of Singer branches,attracting and generating sales from walk-in customers; and expanding its distribution network to 1,000 branches (from 561 branches in May 10 or +78%) within the next five years.
Now that the stock market has ran amok thanks to increased foreign participation, will BJR move up with the rising tide as a 'random walk participant' and fell as fast when the funds back-washed out of the country?
Or has BJR finally come out from its 'Hole-land' and demonstrate a new character on its own accord to attract serious investors which will hold it long term for the intrinsic strength that it is building, profitability and for its openly declared 50% dividend policy?
Let us watch!
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