Stock Name: KFC
Company Name: KFC HOLDINGS (M) BHD
Research House: BIMB
KFC Holdings (M) Bhd
(Feb 22, RM3.80)
Maintain neutral at RM3.85 with target price RM4.30: KFCH revenue and net profit for the quarter rose by 9.6% and 37.6% year-on-year (y-o-y) to RM683.9 million and RM38.9 respectively, million thanks to:
(i)'' ''aggressive expansion of its restaurants;
(ii)'' ''strong marketing of products; and
(iii)'' ''improvement in sales throughout Malaysia and overseas.
On a sequential basis, KFCH's revenue and net profit increased by 8.3% and 24.2% quarter-on-quarter (q-o-q) respectively, thanks to an improvement in consumer spending driven by encouraging economic growth. GDP in 4Q10 grew by 4.8%.
Underpinned by strong consumer spending with aggressive restaurant expansion, KFCH's full-year revenue and net profit jumped by a sterling 10% and 20%. There is no adjustment on earnings estimates as the results were in line with our expectations.
We are bullish on KFCH's future outlook as consumer sentiment remains stable, supported by strong economic performance as Malaysia's 2011 GDP is poised to linger between 5% to 6% this year with our in-house projection of 5.7%
Moving forward, we foresee that KFCH's 1QFY11 performance will continue to be favourable, driven by strong consumer spending thanks to tame inflation and higher disposable income.
KFCH's FY11 net profit is forecast to grow by 15%, mainly driven by:
(i)'' ''strong expansion of KFC restaurants;
(ii)'' ''better economic outlook; and
(iii)'' ''the seasonal factor such as school holidays and Chinese New Year, Hari Raya, Deepavali and Christmas which are expected to boost consumer spending.
We maintain our 'neutral' call on KFCH with an unchanged target price of RM4.30. The target price is derived by pegging FY11 earnings per share of 21.7 sen to target PER of 20 times. Total return is at 13.7%, including 2% prospective dividend yield. ' BIMB Securities Research, Feb 22
This article appeared in The Edge Financial Daily, February 23, 2011.
Company Name: KFC HOLDINGS (M) BHD
Research House: BIMB
KFC Holdings (M) Bhd
(Feb 22, RM3.80)
Maintain neutral at RM3.85 with target price RM4.30: KFCH revenue and net profit for the quarter rose by 9.6% and 37.6% year-on-year (y-o-y) to RM683.9 million and RM38.9 respectively, million thanks to:
(i)'' ''aggressive expansion of its restaurants;
(ii)'' ''strong marketing of products; and
(iii)'' ''improvement in sales throughout Malaysia and overseas.
On a sequential basis, KFCH's revenue and net profit increased by 8.3% and 24.2% quarter-on-quarter (q-o-q) respectively, thanks to an improvement in consumer spending driven by encouraging economic growth. GDP in 4Q10 grew by 4.8%.
Underpinned by strong consumer spending with aggressive restaurant expansion, KFCH's full-year revenue and net profit jumped by a sterling 10% and 20%. There is no adjustment on earnings estimates as the results were in line with our expectations.
We are bullish on KFCH's future outlook as consumer sentiment remains stable, supported by strong economic performance as Malaysia's 2011 GDP is poised to linger between 5% to 6% this year with our in-house projection of 5.7%
Moving forward, we foresee that KFCH's 1QFY11 performance will continue to be favourable, driven by strong consumer spending thanks to tame inflation and higher disposable income.
KFCH's FY11 net profit is forecast to grow by 15%, mainly driven by:
(i)'' ''strong expansion of KFC restaurants;
(ii)'' ''better economic outlook; and
(iii)'' ''the seasonal factor such as school holidays and Chinese New Year, Hari Raya, Deepavali and Christmas which are expected to boost consumer spending.
We maintain our 'neutral' call on KFCH with an unchanged target price of RM4.30. The target price is derived by pegging FY11 earnings per share of 21.7 sen to target PER of 20 times. Total return is at 13.7%, including 2% prospective dividend yield. ' BIMB Securities Research, Feb 22
This article appeared in The Edge Financial Daily, February 23, 2011.
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