Posted by PETERMOO > 2022-10-26 20:31 | Report Abuse

STARBUCKS ' coffee getting hot now?

Posted by treasurehunt > 2022-11-01 09:31 | Report Abuse

You dumped the tickets yesterday. No wonder la.

Posted by cedcan > 2022-11-02 15:20 | Report Abuse

Coffee sedap woi, where's pang72?

Posted by supersaiyan3 > 2022-11-07 11:19 | Report Abuse

https://www.nst.com.my/business/2022/10/841622/starbucks-have-ev-charging-station-across-76-drive-thru-outlets-malaysia

EV charging! like this very much.

BJfood not a good name, change to Starbuck instantly RM2.00 already. lol

Posted by cedcan > 2022-11-08 09:26 | Report Abuse

Momentum building up?

Posted by newbie8080 > 2022-11-10 19:45 | Report Abuse

Earnings would likely normalise to pre-pandemic level next quarter onwards.
Higher inflationary pressure together with impending slower growth next year, will likely dampen consumer spending.
Recovery may return once globally inflation issue sorted out.

Posted by observatory > 2022-11-10 22:32 | Report Abuse

The management talks about rising cost. "The lower pre-tax profit was mainly due to margin compression as a result of the higher operating costs incurred and the weaker Ringgit Malaysia."
Operating margin has indeed declined from 24% in the previous quarter to 19.4%. However after adding back depreciation, the EBITDA margin remains unchanged at 35%.

Cash from operating activities at RM78m will be over RM310m if annualised, close to last year level.
Investment has run up to RM25m in current quarter, including RM5m for JV (Paris Baguette’s?). Annual CAPEX was RM70m in FY22. Assume FY23 CAPEX is RM100m.
Assume the current gearing is already optimal, the free cash will be 310 - 100 = RM210m or 12 sen per share.

However RM33m has been used to pay down borrowing in the current quarter. In FY22 the company paid down RM80m of its borrowing. If we assume another RM80m is paid down in FY23, the free cash after CAPEX and debt repayment will be 310 - 100 - 80 = RM130m, or 7sen per share.

Taking the middle point, free cash will be about 9 to 10 sen per share, still close to 10% yield. Are the assumptions reasonable? Can the current good margin sustain?

Posted by VegeBird1219 > 2022-11-11 14:18 | Report Abuse

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.

Posted by VegeBird1219 > 2022-11-11 14:18 | Report Abuse

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.

Posted by dragon328 > 2022-11-11 14:30 | Report Abuse

BJFood operating cashflows were strong at RM77.6m minus interest expenses RM6.4m and payment of lease liabilities RM17.9m = RM53.3 million annualised to RM213 million or 10.9 sen per share.
Capex for Starbucks and KKR expansion rose to RM19.5m in Q1 FY2023, annualised to RM78 million which is within expectation.
Hence free cashflows may come in at RM213m - RM78m - RM5m = RM130 million or 6.6 sen per share.

Posted by dragon328 > 2022-11-11 14:36 | Report Abuse

Dividend for Q1FY2023 is just 0.5 sen amounting to RM9.74m, annualised to RM39 million or 2.0 sen per share.

I suspect they may have taken into account the need to pare down borrowing progressively, given the outstanding debts at RM173.65 million as of 30 Sept 2022.

They still have free cashflows of RM130m - RM39m = RM91m for debt reduction.

Given that the company has reduced debts by RM32.5m in Q1 FY2023, they still have room to reduce debts further by another RM58.5 million from RM173.65m to RM115 million level which I deem comfortable.

Posted by dragon328 > 2022-11-11 14:39 | Report Abuse

Looking beyond FY2023, I expect the company to be more generous in dividend payouts as free cash flows may increase by another RM4m from interest expense saving after debt reduction to RM134m a year (assuming similar capex level of RM80m a year and similar profit level).
I think the company can then declare dividends of 5.0 sen or above every year.

Posted by akmal222 > 2022-11-11 16:05 | Report Abuse

Hmm...why no bull today??? coffee break ea...hmm

Posted by observatory > 2022-11-11 17:08 | Report Abuse

@dragon328, thanks for sharing your calculation. Yes, interest payment RM6.348m should be deducted before arriving at the net cash from operating activities. I missed it.
While most companies assign interest payment under Operating Cashflow, BJFood has parked it under Financing Cashflow. What might be the reason for this discrepancy in practice?

Posted by observatory > 2022-11-11 17:08 | Report Abuse

You've also deducted payment of lease liabilities RM17.9m before arriving at the final operating cashflow.
However, this item is the "payment of principal portion of lease liabilities". Given it's the principal portion, it's for capital lease where the company could own the asset eventually. Shouldn't principal payment not be deducted in the operating cashflow? (The depreciation of the fixed asset has already been accounted for)

Posted by observatory > 2022-11-11 17:09 | Report Abuse

CIMB has downgraded to Hold in anticipation of weaker earning outlook due to weaker consumer sentiment. However Starbucks still plan to open many new stores. What is your view?

Posted by dragon328 > 2022-11-11 17:09 | Report Abuse

BJFood share price has already gone up almost 20% in 4 weeks from recent low of 0.83 to all time high of 0.99-1.01 today, cannot expect much more.

Furthermore, its Sept qtrly result actually dropped 17% q-on-q, no big surprise there

Posted by dragon328 > 2022-11-11 17:14 | Report Abuse

@Observatory, I deduct lease liabilities payment from operating cashflows as this payment is essentially rentals paid to shop owners, which are operating costs. It is only that current accounting treatment tends to capitalise rental payments as lease liabilities in the balance sheet, then expenses off the lease liabilities interest portion in the P&L but charges out the full lease liabilities interest and the principal repayment portions in the Cashflows statement (as both the interest and the principal repayment portions are essentially rental payments, actual cash out)

Posted by dragon328 > 2022-11-11 17:19 | Report Abuse

As for its earnings outlook, I think its operating margin will come under pressure as ringgit depreciates a lot against US dollars, Starbucks cannot just keep raising prices of the drinks (now already at RM15-18) beyond RM20 per coffee. This inflated prices will for sure dampen demand, for one I will go more to local kopitium for a traditional white coffee at RM2.00 per cup, rather than spending 10x more for a Starbucks coffee.

Posted by dragon328 > 2022-11-11 17:23 | Report Abuse

I have not read the CIMB report, but I see Maybank analyst raising tp for BJFood from RM1.24 to RM1.50 after raising EBIT margin by 2% to 20%, which I think is hard to achieve in the high inflation environment.

But I do note that growth may come in a decent rate as BJFood plans to open 35-40 new Starbucks outlets in FY2023 from currently 376 outlets, for a 10% increase in topline.

Posted by dragon328 > 2022-11-11 17:25 | Report Abuse

For higher earnings growth, I have already switched to SEM as I see similar growth trend in its 7-11 business profit margin as in BJFood profit margin expansion from 2021 once they achieved economy of scales and successful rolling out of higher margin store format (drive-thru store for Starbucks and 7-Cafe format for 7-11)

Posted by dragon328 > 2022-11-11 17:30 | Report Abuse

Furthermore, I see higher free cashflows for SEM compared to BJFood

As calculated above, BJFood may register free cashflows of RM134m a year or 7 sen per share vs current share price of RM0.99 giving a FCF yield of lower than 7%.
SEM may register over RM300m of operating cashflows a year, minus off planned capex of about RM80m, free cashflows may come in about RM220-230m a year or about 18 sen per share vs share price 1.65, giving a FCF yield of 10.9%

Posted by supersaiyan3 > 2022-11-11 21:19 | Report Abuse

dragon328, thanks for your analysis.
Well said

Posted by observatory > 2022-11-11 21:51 | Report Abuse

@dragon328, thank you for your sharing. Yes I read about your analysis on SEM.

I did follow the share price since the talk about potential sales of Caring. The gradual share price run up over a 3 week duration and the subsequent dumping looks very strange to me.

On the business side, given SEM has 2,400 stores nationwide, it probably take many new 7-cafe to move the needle?

Posted by dragon328 > 2022-11-12 14:19 | Report Abuse

certainly so as SEM only had 31 7-Cafe as of 30 June 2022 and planned to have 130 7-Cafe by end 2022. This means that it can open 100 7-Cafe outlets in 6 months.

If it continues doing so at a pace of 200 7-Cafe per year, then in 5 years time 50% of its stores will be in 7-Cafe format. The capex for opening a new 7-Cafe is higher at RM500k-600k compared to RM300-400k for a traditional 7-11 convenient store. But I think converting a traditional 7-11 convenient store into a 7-Cafe will need lower capex than RM500-600k, possibly just RM300k. If I take an average of RM450k for opening / converting a 7-Cafe, then to open 200 7-Cafes will require about RM90 million capex a year, which is within my ballpark estimates.

Posted by dragon328 > 2022-11-12 14:20 | Report Abuse

CIMB analyst has budgeted a higher capex of RM120 million a year, taking the top end RM600k as average capex for 200 new 7-Cafe a year, but I think it will likely come within RM100m

Posted by dragon328 > 2022-11-12 14:38 | Report Abuse

It will take time for SEM to realise the benefit of opening more 7-Cafe as it needs to be selective in terms of location while being mindful of the capex requirement and potential competition.

But the benefit of realising higher transaction size will be huge as it flows almost directly to the bottom line. This can be clearly seen from its improving net profit margin of 3.9% in 2Q2022 (PAT of RM25m on revenue of RM644m) for convenient store segment vs 2.6% in 3Q2020 (PAT of RM13.2m on revenue RM505m).

Posted by dragon328 > 2022-11-12 14:46 | Report Abuse

The transaction ticket has increased by 15% to RM8.43 per pax in 2Q2022 vs 2Q2021, driven by higher margin food items, without any significant contribution from 7-Cafe yet. And the longer operating hours for some 7-11 stores has increased no of customers per day per store to 349, leading to a 44% increase in average day sales per store to RM2,940. Coupled with higher transaction size, revenue increased by 47.5% y-on-y.

Posted by dragon328 > 2022-11-12 14:49 | Report Abuse

If you remember, it has taken BJFood several years to start seeing the benefits of having more drive-thru Starbucks stores and to enjoy economy of scales and hence a jump in earnings from early 2021. Before that Starbucks needed to defend its position from various competitors like Coffee Beans, Georgetown Coffee, Oldtown Cafes, various kopitium and a wave of boba tea cafes across the nation.

Posted by bjgdila123 > 2022-11-12 14:54 | Report Abuse

ini VT punya ... 3 tahun baru naik

Posted by dragon328 > 2022-11-12 14:57 | Report Abuse

Competition is good in the sense that it prompts entrepreneurs to innovate in order to survive. VT & BJgroup has demonstrated its ability to defend its retail franchise business and grow its presence at the right time.

We have seen its franchise in McDonalds and Starbucks flourishing after fencing off various competitors. There will be no exception in its franchise in 7-11 too. They know the business well, well enough to fence off newcomers.

Now we are seeing newcomers in convenient stores business expanding aggressively like Family Mart, CU Mart, MyNews stores etc. We see more crowds in some Family Mart or CU as they are new and consumers find some new offerings from Japan and Korea, just like we saw crowds in boba tea cafes early last year. After the new wave of enthusiasm subsides, it will come down to cost effectiveness and location network which 7-11 is still the leader.

Posted by dragon328 > 2022-11-12 14:58 | Report Abuse

For more info and calculations of potential earnings contribution from 7-Cafe, please see my comments in SEM trail

Posted by observatory > 2022-11-12 16:01 | Report Abuse

@Dragon328, again appreciate your sharing. It's certainly worth a more in depth look, despite my impression of its controlling shareholder.

Posted by dragon328 > 2022-11-14 09:26 | Report Abuse

The major shareholder did have controversial moves in the past, just like the dramatic rise in SEM share price in 3 weeks pushed up by company share buyback then a collapse in share price in 2 days. But I think fundamentals will prevail as long as the business model is strong and operating cashflows are strong

Posted by cedcan > 2022-11-15 10:00 | Report Abuse

Starbucks coffee smells good!

Posted by cedcan > 2022-11-16 09:51 | Report Abuse

First thing in the morning, lim kopi dulu!

Posted by thundery > 2022-11-16 12:14 | Report Abuse

Every weekend, all Starbuck outlet full occupied

Posted by supersaiyan3 > 2022-11-22 23:21 | Report Abuse

RM1.15 coming.

Posted by pekanwoohoo > 2022-11-23 15:10 | Report Abuse

Back to 95 cents first please, otherwise this rising upwards is not healthy. Prefer steady increase

Posted by Akifuyu > 2022-11-23 16:31 | Report Abuse

if it goes back to 0.95, there is no point in breaking out from the 1.00 level

Posted by thundery > 2022-11-30 08:16 | Report Abuse

All the directors including Vincent are selling since last week non stop

Posted by troy88 > 2022-11-30 10:47 | Report Abuse

VT the crooked businessman doing his thing again..

Posted by keng88 > 2022-12-02 14:53 | Report Abuse

Strong support at 1.00

Posted by pekanwoohoo > 2022-12-06 16:56 | Report Abuse

GG already. Surely dropped to hell after this. Bye bye

Posted by keng88 > 2022-12-09 12:34 | Report Abuse

Aiyoyo.......up back

Posted by supersaiyan3 > 2022-12-09 23:28 | Report Abuse

Up at double speed. And most who wants to sell probably have sold.

Posted by cywk > 2022-12-28 12:52 | Report Abuse

what happen drop again. good buy now

Posted by BursaKakis > 2023-01-18 20:41 | Report Abuse

Berjaya Food to set up five more Paris Baguette after maiden Pavilion KL opening
https://www.nst.com.my/business/2023/01/871444/berjaya-food-set-five-more-paris-baguette-after-maiden-pavilion-kl-opening

Posted by nicholas99 > 2023-01-31 12:30 | Report Abuse

omg.. he goreng so high price to sell.. now u go buy in.. = gg

Posted by BursaMaster121212 > 2023-02-03 11:35 | Report Abuse

upcoming earnings is freaking strong....1 quarter make almost 100 million because of all the tourist....

better buy now, after announce, at least can up 20%