Preview

BreadTalk Group Limited: A Stable Staple

Satisfactory Essays
Open Document
Open Document
8629 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
BreadTalk Group Limited: A Stable Staple
INITIATING COVERAGE
28 May 2009

RECOM PRICE/TARGET PRICE MKT CAPITALISATION BOARD SECTOR

Buy S$0.425/ S$0.57 S$99.8 Catalist Consumer -F&B

BreadTalk Group Limited
A stable staple

BREAD SP

Michelle Tan, (65) 6210-8671 – michelle.tan@cimb.com

BreadTalk was incorporated in Singapore on 6 Mar 03 as an investment holding company. It was listed on the SGX Catalist Board in 2003 and operates bakery outlets, food courts and restaurants. Spreading wings far and wide. BreadTalk has come a long way. To date, it has 246 bakery outlets, 31 food courts and eight restaurants, supported by more than 2,000 employees in 12 countries. Further growth expected in the PRC and Singapore. The group intends to expand further in China and Singapore, with the aim of sustaining its earnings. We expect this to support strong revenue growth over the next few years. Net profit forecast to grow at 29.3% CAGR over FY09-11. Net profit increased by 64.6% yoy in FY07, before slowing to 6.2% in FY08. The deceleration was blamed on its underperforming J.Co Donuts business. However, this is no longer part of the group after the disposal of its 70%-owned Twin Peak Venture Singapore Pte Ltd. We expect profit growth to pick up to around 31% this year from the opening of new outlets in 2009 and lower raw material costs. We forecast a net profit CAGR of 29.3% for FY09-11. Initiate with Buy and target price S$0.57. We initiate coverage of the stock with a BUY recommendation and a target price of S$0.57, based on sum-of-the-parts valuation. This translates to 34.1% upside.
Financial summary
FYE Dec Revenue (S$ m) EBITDA (S$ m) EBITDA margins (%) Pretax profit (S$ m) Net profit (S$ m) EPS (S cts) EPS growth (%) P/E (x) Gross DPS (S cts) Dividend yield (%) P/NTA (x) ROE (%) Net cash per share (S$) P/CF (x) EV/EBITDA (x)
Source: Company, CIMB estimates

2007 156.6 21.9 14.0 11.2 7.3 3.2 70.7 13.2 0.2 0.5 1.4 20.9 0.11 3.4 3.8

2008 212.2 26.4 12.4 12.0 7.8 3.3 2.4 12.8 1.0 2.4 1.1 16.1

You May Also Find These Documents Helpful

  • Powerful Essays

    ROE | 23.17% | 22.07% | Margin ratio | 43.52% | 44.73% | Turnover | 189 times | 190 times | PPE | 3.17 | 2.71 | Days sales in accounts receivable | 323.13 days | 324.48 days |…

    • 1971 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    acc 230 week 8

    • 578 Words
    • 3 Pages

    Some examples of important financial data to pay attention to consist of liquid ratios, current ratio, cash flow ratios and the average collection period. Liquid ratios are used to determine if a company can come up with enough cash to cover unexpected expenses. For example if something came up cold the company sell stock or liquidate assets to cover them. Comparing this ratio against industry averages would be a good way to judge if the company in question has sufficient liquidity. Watching the cash flow ratio can provide insight into the operating activities and REC has improved from 06’ to 07’. Another category that has improved is its collection period. The data shows that the average collection period is five day shorter than the previous year. These are all…

    • 578 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    18.00% 16.00% 14.00% 12.00% 10.00% 8.00% Jan-10 David Jones Limited Jan-11 Jan-12 Myer Holdings Limited 15.00% 14.00% 13.00% 12.00% 11.00% 10.00% 9.00% Jul-09 David Jones Limited Jul-10 Jul-11 Myer Holdings Limited…

    • 1831 Words
    • 8 Pages
    Satisfactory Essays
  • Satisfactory Essays

    acct cheat sheet

    • 870 Words
    • 3 Pages

    profit margin on sales for 2013. Net income/net sales. receivables turnover ratio net sales/average A/R inventory turnover ratio for 2013. COGs/average inventory asset turnover ratio for 2013.Net sales/average total sales average collection period for 2013.365/receive turnover ratio. average days in inventory for 2013.365 / inventory turnover ratio decimal place. return on assets for 2013. Profit margin*assets turnover. return on stockholders' equity for 2013. Net income/ average stockholder’s…

    • 870 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    I will provide data and information regarding the Return on Equity (ROE), which shows growth of the stock. I will also provide a projected future growth rate of earnings, its rate of return and valuation techniques.…

    • 1517 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    Foodcrop Spot

    • 570 Words
    • 3 Pages

    From the Financial and Market data, some ratios indicate that Foodcorp needs to be improved since these following ratios – Inventory Turnover, Return on average…

    • 570 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    kroger, essay

    • 39938 Words
    • 160 Pages

    An Equity Valuation and Analysis of Kroger Co. As of November 1, 2007 Brandon Dunn Cliff Fielden Trey Keith Sean Murass brandon.dunn@ttu.edu cfielden2@yahoo.com trey.keith@ttu.edu murass02@yahoo.com 0 Table of Contents Executive Summary……………………………………………………………………..…………….. 4 Business & Industry Analysis……………………………………………………………. ………..11 Company Overview……………………………………………………………………………

    • 39938 Words
    • 160 Pages
    Good Essays
  • Powerful Essays

    Mgm Resortscase Study

    • 24944 Words
    • 100 Pages

    52 week price change Revenue (2004) Market Capitalization Shares Outstanding Dividend Yield 3-month Avg. Daily Trading Volume Percent Institutional Ownership Book Value per share (mrq) ROE (2004) ROA (2004) Est. 5 year EPS growth rate…

    • 24944 Words
    • 100 Pages
    Powerful Essays
  • Powerful Essays

    Founded in 1976, Costco grew from its roots in Seattle, Washington in 1983 to a worldwide corporation expanding over 9 countries and gaining over 71 million members as of 2013 and a retention rate of over 90 percent. With this sort of power, Costco recognizes its leadership in an industry where imitation is causing sameness, something that originally set us apart from our competitors. We believe that the following should be our focus to enhance our business in order to separate ourselves…

    • 5738 Words
    • 23 Pages
    Powerful Essays
  • Powerful Essays

    Krispy Kreme Doughnuts, as discussed in Darden Business Publishing Case UVA-F-1479, appears to be at a crossroads. After years of astronomical growth, the company find its share price plummeting in the midst of discoveries about faulty accounting practices. The following paper examines several issues behind the sudden decline First, the historical income statements and balance sheets are examined to determine the financial health and current condition of the company. This is followed by an analysis of key financial ratios across time and versus industry standards. Next, the paper addresses if Krispy Kreme is financially healthy at year-end 2003 and, if so, what accounts for the firm’s recent share price decline. The paper concludes with a discussion of the intrinsic investment value in the company.…

    • 2204 Words
    • 9 Pages
    Powerful Essays
  • Satisfactory Essays

    2012 Amount Percent 443,854 100.0% 335,127 75.5% 108,727 24.5% 85,265 19.2% 23,462 5.3% 3,096 0.7% 2,160 0.5% 24,398 5.5% 7,944 1.8% 16,454 3.7% 2011 Amount Percent 418,952 100.0% 314,946 75.2% 104,006 24.8% 81,361 19.4% 22,645 5.4% 2,897 0.7% 2,004 0.5% 23,538 5.6% 7,579 1.8% 15,959 3.8% 2010 Amount Percent 405,132 100.0% 304,106 75.1% 101,026 24.9% 79,977 19.7% 21,049 5.2% 2,953 0.7% 1,884 0.5% 22,118 5.5% 7,156 1.8% 14,962 3.7%…

    • 202 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    Stock turnover | | 128 days | 178.9 days | | 46.80 days | 49.23 days | Trade Debtors (Receivables) Days | | 26.32 days | 44.50 days | | 55.75 days | 54.97 days | Trade Creditors (Payables) Days | | 47.63 days | 37.34 days | | 26.51 days | 31.63 days | Asset turnover | | 2.01x | 2.08x | | 3.64x | 3.12x | Retail Revenue to Number of Stores | | 2.68 m | 2.67 m | | 4.39 m | 4.31m | LIQUIDITY | | 2010 | 2009 | | 2010 | 2009 |…

    • 1568 Words
    • 7 Pages
    Satisfactory Essays
  • Better Essays

    Southwest Financial Analysis

    • 2611 Words
    • 11 Pages

    Total Resource Network (TRN) congratulates Southwest Airlines for thirty-eight years of consecutive profitability. This is a major accomplishment that should be applauded especially during this economic recession and recovery period. Southwest’s success has been attributed to their core values and mission that begin with their employees and exceptional customer service. These two attributes along with low airfares have translated back into sound financial performances year after year. It would seem that Southwest is at a cruising altitude with so many multiple years of profitability. TRN understands that Southwest is always striving to elevate to a higher level with their employees, services, fares, and customers therefore an in depth financial analysis was conducted to evaluate Southwest’s financial health. The following financial ratios listed below, along with industry averages and Jet Blue financials, were utilized to gauge Southwest’s financial stability to champion your successes and review your challenges as opportunities.…

    • 2611 Words
    • 11 Pages
    Better Essays
  • Powerful Essays

    Panera Bread Company

    • 734 Words
    • 3 Pages

    Net profit margin Return on stockholder’s equity Debt to Equity Ratio Current Ratio 2006 .071 14.8% .365 1.16 2005 .081 16.5% .381 1.18 2004 .081 15.9% .345 1.05 2003 .084 15.8% .239 1.58 2002 .076 14% .215 1.83…

    • 734 Words
    • 3 Pages
    Powerful Essays
  • Good Essays

    Krispy Kreme doughnuts, Inc is facing a crisis of a drop in share price like never before since its initial public offering in the year 2000. The situation of Krispy Kreme does not look so bright after it has reacquire the underperforming franchisees’ stores worth of 170$ million. In the end of 2004, the company has some problem related with its accounting for the acquisitions of certain franchisees that it has to restated its financial statement, which would lower the pretax income by 6 to 8 million. The company fails to file the report on time. This puts the company at risk of being delisted out of NYSE, moreover there’s a low carbohydrate diet trend coming. All those storms have put the company’s share to sell at less than $10 a share. Therefore we recommended Krispy Kreme consider buying back its share…

    • 757 Words
    • 4 Pages
    Good Essays