HLIB noted that at present, there are 363 Starbucks with seven new stores launched in 1QFY23 - two of them being drive-through concept stores.
There are also plans to launch nine new KRR stores in FY23 with a smaller footprint restaurant concept in high traffic secondary township areas, it added.
As for the group's vegan venture Sala, HLIB reported there are seven stores and plans to open four more outlets as well as introduce innovative new plant-based food and beverage offerings to customers.
For 1QFY23, Berjaya Food recorded revenue of RM283.1mil and core profit after tax and minority interests of RM34.7mil, representing growth of 50.8% and about 200% respectively.
"The latter accounted for 22%/28% of our and consensus full year forecasts which we deem to be within our expectations but exceeded consensus," said HLIB, while noting that 1Q is a historically weaker quarter for the group with the absence of festive period or long holidays.
Market participants will be eyeing the U.S. CPI data this week for trading cues "where sticky inflation may strengthen the Fed's hawkish stance and intensify recession fears", weighing on oil, CMC Markets analyst Tina Teng said.
U.S. crude oil stocks were expected to have risen by about 1.1 million barrels last week, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of reports from the American Petroleum Institute due at 4:30 p.m. ET (2130 GMT) on Tuesday, and the Energy Information Administration due at 10:30 a.m. (1530 GMT) on Wednesday. – Reuters
Oil prices were little changed early on Tuesday as supply worries offset recession fears and China's commitment to its zero-COVID policy.
Brent crude rose 7 cents, or 0.1%, to US$97.99 a barrel by 0155 GMT, while U.S. West Texas Intermediate (WTI) crude rose 7 cents, or 0.1%, to $91.86 a barrel.
Both benchmarks hit their highest since August on Monday amid reports that leaders in China, the world's top crude importer, were weighing an exit from the country's strict COVID-19 restrictions.
However, Chinese health officials over the weekend reaffirmed China's commitment to its strict zero-COVID policy. Also, recent data showed the country's exports and imports unexpectedly contracted in October.
Post Malaysia reopening borders in April-22 (along with regional countries), we have seen strong recovery of air travel demand especially for ASEAN segment. As more areas reopen their borders (recently Japan, Taiwan & Hong Kong) and further relax restrictions, we expect continue strong recovery of air travel demand (especially when China reopens, anticipated by year end). Maintain OVERWEIGHT rating on the Aviation sector with BUY recommendations on CapA (TP: RM0.88) and MAHB (TP: RM7.85).
Post reopening borders in April-22, we have seen strong recovery for air travel demand especially in the domestic segment, up to 92.1% of pre-pandemic 2019 level in May-22 before sliding in subsequent months. On the other hand, ASEAN segment climbed gradually to 48.3% in Aug-22, as compared to the slower paced international segment (non-ASEAN) at 28.5%. We believe current trends are explained by:
(i) initial jump in domestic travel demand due to standardised national travel policy, hometown bound travel and ease of airlines reinstating domestic capacity;
(ii) stronger recovery of ASEAN travel demand as most ASEAN countries eased border policies with similar requirements at almost the same time, while regional travel offers relatively cheaper alternatives (vs non-ASEAN), and airlines gradually shift capacity from domestic to ASEAN routes (given MRO constraint in re-instating airworthiness of decommissioned aircrafts and staff constraint);
(iii) slower recovery of non-ASEAN international travel demand as major travel destination China, Hong Kong, Taiwan and Japan remained closed or limited by various requirements and relatively more expensive travel costing.
Nevertheless, we view the trends are still relatively healthy. MAHB has guided weekly planned international seat capacity to experience stronger uptrend, achieving ~60% of pre-pandemic level by year-end (from 41.4% in Aug) and domestic’s slower uptrend to ~75% by year-end (from 66.4% in Aug). We expect continued growth in demand for international travel as more countries re-open their borders (recently Japan, Taiwan and Hong Kong) and ease entry requirements.
Source: Hong Leong Investment Bank Research - 18 Oct 2022
3-year earnings CAGR of 3.6%, driven by the capacity expansion to meet the increasing demand for vehicle tyres. That said, we believe that the earnings growth will be mitigated by the normalisation of ASPs in the long term from the current elevated levels. We are positive on the group’s dividend policy, with a target payout ratio of at least 50% of earnings. Given the relatively small market cap and lack of track record, we ascribe a 10.5x FY23F P/E, which is at a discount to the FBMSC’s average trading P/E of 12.5x, implying FV of MYR0.76.