A Funny Thing Happened on the Way to Paradigm Mall GSC

Brand New Disappointment 

We really did not expect the outcome though it did end up well and not to our detriment.

So, there we were rushing to finish our martabab at the Teh Tarik Restaurant. At 5 minutes to 12.40 pm, we were snugly seated in Hall 9 but the show did not go on. We did not get to see Snow White and the Huntsman. 


One of the cinema staff then announced that there will be no show because of a technical hitch and we could get our refund. Obviously, no one was going to take that lying down. So demands were made for complimentary ticket beside the return of our cash.

The manager came in and accede to our request.

So, we got the cash back and the two complimentary tickets.

Snow White will have to wait, I guess.

What a day!

BJFoods-A Fair Value at RM1.45

Berjaya Foods and Berjaya Land looks Good

Berjaya Foods (BJF) went ex-dividend today,sliding a wee bit in the opening bell before strengthening towards the closing seconds of trading today. It ended at RM1.28 for a 6 sen gain. Volume,as usual, was low, which has been the pattern for BJF for quite sometime now except for a volume spike on 11 June and a price spike on 21 June 2012.

Ambank Research today picked BJF as the stock focus today.

Its recommendation: Hold and not let go as it is poised for rapid expansion. However, it foresees a limited upside and pegged the counter at a fair value of RM1.45, based on a 13x PE on CY13F earnings. Since 25 May (97 sen) , BJF has risen 39% to the current price.

Jewel in the Crown

Ambank foresees the earnings trajectory to remain strong with a greater certainty in growth as its expansion spree remains well on track. The impending acquisition of a 50% stake in Starbucks is expected to be completed in August. Starbucks, apparently has achieved growth of 26% in the last six months-the highest in South-east Asia.


Given the strong franchise value, earnings of CAGR of 51% remains robust over FY13F to FY15F.


So, what is in store for shareholders? 


As the rights price is RM0.65 sen per share , if the share price maintains at this level, it means that one will stand to gain 0.63 sen when the exercise is over. Then there is the free warrants to boot. I am not sure of the conversion price as it has not been fixed.

If the Starbucks acquisition  is expected to b completed in August, I guess the rights exercise will take place in July.

Given the short time window of only a month or so, I expect dynamic action on BJF as speculators will come in to shore up prices. As it is a very tightly held counter by both the majority shareholder (Berjaya Group  etal ) and reluctant minority retail shareholders, the technical situation can see the share potentially breaching the RM1.50 level.

The Indonesian Revenue Factor

Then, there is the Kenny Rogers expansion into Indonesia. With the growing affluence in this republic and better purchasing power for restaurant-style fast-foods, it will certainly impact upon the revenue and profit of BJF in the ensuing years to come.


Also for fast food play, with KFC and QSR bidding farewell from Bursar KL, it looks like BJF will be the new leader in pole position way ahead of Old Town Coffee.


For now, let us watch how the counter will move in the near future given the technical shortage of sellers.