Brahim’s up on report of talks to Buy Burger King franchise

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KUALA LUMPUR (Sept 15): Brahim’s Holdings Bhd shares advanced in early trade on Monday after the Edge weekly reported that the company was in talks with Ekuiti Nasional Bhd (Ekuinas) to buy the latter’s Burger King (BK) franchise.

At 9.05am, Brahim’s rose 4.03% or five sen to RM1.29.

Hong Leong IB Research (HLIB) has upraded Brahim’s Holdings Bhd to a Buy with an unchanged target price of RM1.62

In a note Monday, HLIB said it was positively surprised by the reported news.

The research house said it was sensible for Brahim’s to take the initiative to acquire BK (if only valuation is fair) as it would allow Brahim’s to diversify its earnings away from MAS. Pricing however is not revealed at this juncture.

“We also strongly opine that Brahim’s would be eyeing for more M&A opportunities in either F&B or airline catering business segment, diversifying and expanding its foothold internationally.

“Target price remained unchanged for now at RM1.62 based on FY15’s 13.5x P/E and 7x EV/EBITDA, a 20% discount to peers.

“We upgrade our recommendation to Buy given the recent share price retracement,” it said.