KFC-Another 25 New Outlets in the Offing

KFC's AGM yesterday saw the announcement of 25 new outlets-15 standard ones and the balance 10 drive-ins.

“Each standard outlet would cost RM1mil while the one with drive-through facility would be around RM3mil so it seems.

Currently, the company has a total of 515 outlets nationwide.

  

Internationally, another nine outlets will open in India by year-end from the existing eight outlets there.

Contribution from India is still be insignificant to the company's earnings this year as KFC have just started there about eight months ago.Currently positive contributions come from Singapore and Brunei.

KFC is currently not impacted by the rising poultry price as the group is involved in integrated poultry business where chickens were bought at a fixed margin.

KFCH is 50.6% owned by QSR which in turn is 57.5% controlled by plantation company, Kulim. Joho Corp holds 53% of Kulim.

JCorp is a public enterprise entity controlled by the Johor state with more than 280 companies under its stable and eight publicly-listed companies with businesses like oil palm plantation, healthcare, food and poultry in Malaysia and overseas.

JCorp, which was saddled with debts totalling more than RM6bil as at Dec 31, 2009, has been in the media limelight lately. Some RM3.6bil is due for repayment next year.JCorp had been reported as saying that it would not embark on any “fire-sale” involving the sale on any of its prize assets for its bond redemption.

It was said to be in the midst of evaluating ways to ensure the redemption of the bonds including the disposal of land it directly owned to settle the debts.

Do you think Johor Corp will dispose QSR and KFC and yet have indirect ownership?

That will be one finger-licking proposition,wouldn't it?

YTL-Will it Pay?

This is Day 3 of the ex-split. Not much magic has been spun.

That is good and that is also not so good.

Let us look at the not so good and see whether there exists a silver lining before we look at the good.

The price has only risen 11 sen since YTL Corp (YTL) went ex. For those who wanted to see a spike in price, it was downright disappointing. Many expected it to race to the moon. That did not happen. It did not come close even to touch RM1.80.

Right now it is languishing around RM1.70. Hopefully the fantastic Wall Street overnight performance can translate into something for YTL today. As always, expect sellers to come in drove if prices move up too rapidly. Then gestation will have to set in before price can really firm upwards.

So, where is the silver lining? Can anyone see it? I have not.

The good news. There is also none in the short term until something appears before YTL holds its AGM sometime in late November. That is another 7 months to go. By then, we should know what dividend will be paid up too as well as revenue generated.

As the market is buoyed or stymied by sentiments,I would say there is good sentiments for a blue chip such as YTL. Chances are there will be more investors than speculators in YTL and so I see more chance of a price rise in the offing in the medium term.I expect most fund managers to buy in and lock it for the long term. Not many such opportunity for a blue-chip counter such as YTL. This is the prime buying period and so I believe more buying is on which is seen by the incessant bargain hunting and the huge block transactions.

There was no magic today with YTL shares touching a low of RM1.68 before ending flat at RM1.70.

The shares goes split officially tomorrow.

YTL Corp-Gestation,Digestion and Indigestion

Today is the second day of the 5 for 1 share split for YTL Corp(YTL). The morning was great as it start off for a 3 sen gain. Pushing against the heavy selling gravity, it punched through at RM1.74 but could not hold its ground and slipped to a low of RM1.69.

At about closing time, volume hit  close to 1,300,000 shares and  gain a paltry 2 sen to RM1.70 {I thought it would hit RM1.74. Fat hopes!}

As expected, there is a time called the gestation period. YTL is at that stage. There is a deluge of sellers who have made their money and are looking to exit. These are the speculators who has made a fast buck. The buyers are most likely YTL buying back its shares into the Treasury because of its under value status and the long term institution funds ranging from EPF, Pensions Fund,SOSCO, Public Trustees and perhaps even PNB.

I also think that some foreign funds might be taking small bites.

Once gestation is over and digestion is complete, the share should go up. Before that, expect indigestion and selling pressure from weak holders one more round but at a higher level.

Until then, expect YTL to go for marginal price increases but no big push!