BreadTalk Group Ltd (5DA)

With the markets behaving as it is, I've been super busy watching the market and making my moves to ensure that we can pocket the gains and happily go on our holiday. Today, I shall delve into BreadTalk Group Ltd (BreadTalk) and how I am watching this stock like a hawk.

Source: BreadTalk Group Ltd website


I've always been keen to invest in the F&B sector and BreadTalk was one of those stocks that caught my eye due to its sheer ever growing presence in Singapore. I read its 2013 annual report and the key facts that caught my attention are:

1. Their current liabilities are greater than their current assets over the past few years
2. Gearing policy is between 60% to 80%
3. Many of their top twenty shareholders are financial institutions
4. They partially owned some properties in Singapore (Chijmes, Tripleone Somerset and 112 Katong) and China (Beijing Tongzhou) and
5. The key star (Din Tai Fung) in their restaurant business is a franchise which they have held since 2003

My main concern would be whether this franchise (Din Tai Fung) would be taken back in the years to come and how that would affect BreadTalk. I am also iffy on their finances and the high gearing policy is not palatable to me. Although I do know that they are in a way building up the company for the future with their property investments and constant expansion in Singapore and beyond, to me this would represent a growth stock given the paltry dividends. Currently the stock price is at 1.32 but if I would to buy this stock for capital gains, it has to be low enough, say 1.20 to 1.30 as I foresee that it would take mid to long term before I can harvest it for capital gains. 

Naturally, the recent news that they have invested S$3.96 million for its 50% of BreadTalk Thailand with Thailand's Minor Food Group was a positive talking point and hopefully that will translate to excellent results in the near future. Minor Food Group is a force to be reckoned with given its strong core brands such as Swensens, Thai Express, The Coffee Club etc and there have been market rumours that they could eventually take over BreadTalk.

BreadTalk is no newcomer to the Thai market, having been there since 2005. Currently they own 23 outlets (BreadTalk and Toast Box), 2 franchised Din Tai Fung and 3 Food Republic food atria. This joint venture could only mean good things and I hope that it would translate to a higher stock price in the mid term. 

Comments

Post a Comment

Popular posts from this blog

A tale of two stocks

Once in a while say a year or two later, I will be very kaypoh and look at the past stocks that I’ve analysed before just to see how it’s doing. I may or may not have invested or traded in that stock but it just takes one second to click on the link and see the chart. I would have remembered it’s previous price so the current chart can either make me have 3 reactions. Oh chey, it’s the same or not much difference, Wow look at it go to heaven or Wah Kao this one die liao.  For the first reaction I usually just leave the stock be but for the other two reactions, I will go and take a look at my past analysis to see whether I’ve “predicted” it’s future. Two stocks caught my eye as one went to the sky and one straight to hell. Both were similar in the sense that they faced crises except that one managed to turnaround whereas the one in the depths of hell have a long way to go. Let’s start with the one in hell which is  Capita  which I did a sort of write up on in 2014. I last saw it
Read more

FIRE

Recently there has been a lot of talk about financial independence and retiring early. FIRE for short it seems. I know plenty of people around me who have achieved FI but are not RE simply because they are not geared that way. They want to be mentally stimulated at their jobs or businesses and they continue everyday despite being able to tell their bosses to FO.  My ex boss who was retrenched from the bank when he was in his 40s could have RE years ago. He had a world class education from USA, worked in a big shot investment bank in USA and then came back to SG as his parents are here. His house was fully paid up, he had multiple investment properties but he was a man I respected for many reasons. He was highly intelligent but never stingy in mentoring me although he wasn't my mentor as my senior was supposed to do that instead. He was very frugal as he drives a second hand van, dresses simply and his wallet was falling apart but yet he doesn't change it at all. Yet, h
Read more

Losing 10% of your net worth

No, that person wasn't me! ACCICB told me he heard of somebody who lost that much last year in the stock market. Regardless of how much the person's net worth was, 10% is a huge amount to lose in a year! I was asked to guess the dollar value of the person's loss and even after 10 guesses, I still didn't hit the magic number!  Let's just say that it is impossible for most people to have that kind of money in a lifetime and the amount lost can feed 10 families comfortably throughout their existence on earth. That conversation triggered off this post as most people have probably already calculated their realised /& unrealised portfolio loss/ net worth loss now that we are in the early days of 2016. Since investing typically means waiting for the value of a stock to appreciate, in such economic doldrums, valuations get slashed and usually so does dividends. I can't help but wonder with the changing nature of the world, valuations would be calculated dif
Read more