Stock Name: QSR
Company Name: QSR BRANDS BHD
Research House: CIMB

KUALA LUMPUR: CIMB Equities Research has downgraded QSR Brands to NEUTRAL.

The research house said on Tuesday, Nov 30, it likes QSR even without the takeover angle. As at end-September, the same-store sales growth was encouraging at 5% for Pizza Hut and 3% for KFC.

Also, average ticket prices remained at all-time highs of RM40 for Pizza Hut and RM20 for KFC for the second consecutive quarter in 2Q.

'However, the takeover offers have whipped up investor interest, sending QSR's share price to a record RM6.29 on Monday, which offers limited upside to our target price. We, therefore, downgrade our recommendation from outperform to NEUTRAL,' it said.

CIMB Research said this was its first downgrade since it became the first research house to initiate coverage on QSR at RM3.30 on Nov 20, 2007.

'Our EPS forecasts and target price of RM6.50, which factors in a 10% discount to the average valuation of bigger F&B producers, are intact. YTD, the share prices of QSR and KFCH have soared 89% and 113%, outperforming the FBM KLCI by 72% and 95%, respectively.

'Our top F&B pick is now CI Holdings, which is the exclusive franchise holder for Pepsi in Malaysia,' it said.