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4 Stocks This Week

4 Stocks This Week (Restaurants) [8 September 2017] – Japan Foods; Kimly; Jumbo; Katrina

If it looks good, smells good, tastes good, invest in it!

 

Market Sentiments

In the early part of the week, the markets dipped on the back of renewed fears of North Korea’s nuclear tests and any outside retaliation. As the week went by, markets stabilised as it became more apparent that any response would be through diplomatic channels and non-violent in nature.

The Straits Times Index (STI) dipped 1.5%. The Standard & Poors 500 (S&P 500) and the Hong Kong’s Hang Seng Index (HSI) retreated marginally – both under 1%.

Read Also: Read Our Archive Of “4 Stocks This Week”, Dating All The Way Back To The Start Of 2017.

F&B – Restaurants

In Singapore, food is a national pass time. You can often see people travelling from one end of the country to another just to eat at a popular food stall. Diverse cultures in the country has also been a melting pot for local food, and this attracts many tourists from around the world who come to sample our local cuisine.

Because of this, food is also big business here. There are the physical stalls, the food operators, the ingredient suppliers, the manufacturers, the logistical support, the ingredient producers and many more that connects the whole value chain. Naturally, some of these businesses have listed on the Singapore market.

We look at four companies that are in the business of operating restaurants and food outlets.

Read Also: 5 F&B Brands You Didn’t Know Were Listed Companies

#1 Japan Foods Holding Ltd (SGX: 5OI)

Japan Foods operates a chain of over 40 authentic Japanese cuisine outlets under various well-known brands in Singapore, as well as in Malaysia, Vietnam Hong Kong and China.

If you’re a fan of Japanese food, you would have likely sampled its cuisine at its restaurants including Ajisen Ramen, Menya Musashi, Japanese Gourmet Town and Dutch Baby Café.

In its latest 1st quarter results released on 2 August 2017, it posted a revenue of $16.2 million, which was 3.8% lower than the year before. It’s net profit after tax came in at $1 million, 19.9% down from the previous year.

To further expand its presence and growth, it is looking to pursue opportunities in other South East Asian regions as well as franchise non-Japanese food concepts.

Japan Foods also pays out one of the highest dividend yields among its peers, at 4.6%. In the past 52 weeks, the company has delivered a return of 22.2%.

Read Also: Why Establishing Strong Brands In A Company Is Similar To Investing In The Stock Market

 #2 Kimly Ltd (SGX: 1D0)

On 20 March 2017, Kimly became the first coffeeshop operator to list on SGX. Since it was founded it 1990, it has grown to operate an extensive chain of 64 food outlets and 121 food stalls under its umbrella of brands island wide.

On 7 August 2017, it posted its 3rd quarter results, improving its revenue and net profit by 12.4% and 70.2% respectively.

To improve its operations, it is pushing to drive greater efficiency and productivity by implementing a cashless payment system at its outlets, strengthening its online ordering and delivery services as well as completing a four-storey central kitchen that will further improve his operational efficiency.

Further, it completed the acquisition of two operating leases, and will look for more to expand its operations.

Trading at $0.365, it has delivered a return of close to 46% to-date since listing at $0.25.

#3 Jumbo Group Limited (SGX: 42R)

Jumbo was another recently listed F&B group on SGX, listing barely approximately two years ago, on 9 November 2015. Founded in 1987, the group has grown from just one restaurant to operating over 20 restaurants in Singapore, Vietnam, China and Japan offering multiple dining experiences.

On 8 August 2017, it announced its 3rd quarter results, posting a 3.5% and 4.7% growth in revenue and profit respectively.

Its expansion plans include Singapore, China and South East Asia to establish its brands. It is also working to open a central kitchen to improve its operational efficiency.

Since listing at a price of $0.25 a share, it has delivered a healthy growth and currently trades at $0.54. In the past 52 weeks, it has delivered a negative return of 6.5%.

Also Read: Investing In Companies That You Can See Around You

 #4 Katrina Group Ltd. (SGX: 1A0)

Another recent F&B company that listed on the Singapore market, Katrina Group owns and operates 37 restaurants in Singapore, and two restaurants in China, under nine different F&B concepts, including Bali Thai, Streats, So Pho and Indobox.

On 11 August 2017, it announced its half-year results. In it, it posted a 1.6 decline in revenue and a 77.1% decline in net profit. It said the decline in profitability was mainly due to set-up expenses for its new outlets as well as administrative expenses as a listed company and maintenance of its new enterprise resource planning system.

Also in the announcement, it stated that it had opened three new restaurants and had four more in the pipeline. It also has plans to grow the So Pho brand in Hong Kong and China as well as increasing its online food ordering business.

Listed at $0.21, the group’s share price is trading close to 6.7% lower at $0.196. In the past 52 weeks, it has delivered a negative return of 37.1%.

Read Also: 4 Stocks This Week (STI) [31 August 2017) – Jardine Strategic; SIA Engineering; SPH; STI ETF

 

 

4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.

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