KUALA LUMPUR (Sept 17): AmResearch has maintained its Hold rating on Berjaya Food (BFood) at RM3.06 with an unchanged fair value of RM3.05 and said it expects a stronger second half for the company underpinned by seasonality factors, i.e. school holidays and festive seasons, and the full consolidation of BStarbucks.

In a note Wednesday, the research house said that 1Q is considered a soft quarter due to the fasting month.

AmResearch said BFood registered 1QFY15 core net profit of RM6 million (+15% YoY), which was in line with house expectations.

The research house said the 1QFY15 core net profit accounts for a small fraction of house full-year estimate of RM34 million at 18%.

“This is because our estimates include the 7 months earnings contribution from the full consolidation (100% stake) of Starbucks Coffee Sdn Bhd (BStarbucks) from end-September onwards.

“The acquisition of the remaining 50% stake of BStarbucks is expected to complete by September 2014. Post the completion of the acquisition of BStarbucks, we expect this high growth segment to contribute to 54% of revenue in FY15F,” it said.

AmResearch said BFood’s 1QFY15 topline growth (+9% y-o-y) was driven by higher revenue generated at all of its key operating markets, and maiden contribution from Kenny Rogers Roaster in Cambodia despite the Muslim fasting month during the quarter.

It said BFood’s Indonesia operation was still in the gestation period and made a small EBIT loss of RM1.6 million during the quarter.

“Its Indonesia operations are expected to break even in FY16,” it said.