20140312-Maybank_KERPL-Eye_on_China_12页_509kb

报告摘要

BreadTalk Group Summary

Core Content

BreadTalk Group (BREAD SP) is a consumer staples company with a current share price of SGD0.97 and a target price of SGD1.54, representing a 59% increase. The company has a market capitalization of USD211M and an average daily trading volume of USD0.2M. The stock is currently rated as a BUY and is considered undervalued, with a conservative replacement value of SGD1.50 per share based on SOTP analysis.

Main Points

Growth Strategy: BreadTalk is focusing on China as a key growth pillar, aiming to double its revenue to SGD1 billion by FY16E, with a CAGR of 23.1%. It plans to expand its bakery, restaurant, and food court businesses in Tier 2 and Tier 3 cities in China, as well as in other Asian markets.
Market Opportunities: The company has a significant presence in China, with over 300 bakeries across 48 cities. China's growing urbanization and increasing bread consumption are key drivers of its expansion.
Margin Improvement: BreadTalk expects its EBIT margin to increase from 4.3% in FY13 to 4.8% in FY16E. This will be supported by improved margins in food courts and restaurants, as well as higher franchise income.
Franchise Expansion: The company is expanding its franchise model in key Asian markets, especially in China, and has a first-mover advantage in cities like Jakarta and Manila.
Store Growth: BreadTalk aims to increase its store count to 1,000 by FY16E, which will help it gain greater bargaining power and economies of scale.
Financial Performance: Revenue is expected to grow at a CAGR of 18.1%, with EBITDA growing at a CAGR of 16.1%. The company's EPS is projected to grow at a CAGR of 23% over FY14E to FY16E.
Valuation: The stock's current valuation is considered undervalued, with a target price of SGD1.54 based on a 7x FY14 EV/EBITDA multiple.

Key Information

Financial Projections (FYE Dec, SGD m)

Metric	FY12A	FY13A	FY14E	FY15E	FY16E
Revenue	447.3	536.5	631.6	743.2	884.7
EBITDA	49.6	62.3	74.2	86.1	99.9
Core Net Profit	12.0	13.6	16.0	20.0	25.5
Core FDEPS (cts)	4.3	4.8	5.7	7.1	9.0
Net DPS (cts)	1.5	1.8	2.1	2.6	3.3
Core FD P/E (x)	22.8	20.1	17.1	13.7	10.7
P/BV (x)	3.3	2.9	2.6	2.3	2.1
Net Dividend Yield (%)	1.5	1.9	2.2	2.7	3.4
ROAE (%)	14.5	13.9	14.5	16.0	17.9
ROAA (%)	3.8	3.3	3.4	4.1	5.0
EV/EBITDA (x)	4.7	5.7	5.0	4.2	3.4
Net Debt/Equity (%)	39.0	94.8	81.6	61.6	39.2

Key Metrics

52-week high/low: SGD1.17 / SGD0.83
Free float: 35.4%
Issued shares: 282 million
Market capitalization: SGD273.4M
Major Shareholders:
- QUEK MENG TONG: 34%
- LEE LIH LENG: 19%
- Minor International PCL: 11%

SOTP Replacement Cost

Replacement cost of stores: SGD286.5M
Singapore HQ: SGD67.0M
Real estate investments: SGD84.1M
Brand value: SGD77.0M
Net debt: (SGD89.1M)
Total (SGD m): 425.5
Per share (SGD): 1.50

Peer Comparison

Company	Rating	Share Price (SGD)	Target Price (SGD)	Market Cap (USD m)	P/E FY14	P/E FY15	P/E FY16	3-yr EPS CAGR	EV/EBITDA FY14	P/BV FY14
BreadTalk	BUY	0.97	1.40	216	17.0	13.7	10.8	23	5.3	2.6
ABR Holdings	NR	0.83	NA	131	NA	NA	NA	NA	NA	NA
Auric Pacific	NR	1.15	NA	114	NA	NA	NA	NA	NA	NA
Jollibee Foods	BUY	167.50	191.00	3,957	30.9	27.4	20.1	25	17.1	7.4
Minor Int'l	BUY	24.40	28.30	3,015	19.8	18.4	16.2	13	14.2	3.6
CENTEL TB	BUY	31.25	45.20	1,303	21.4	21.1	18.8	19	13.2	3.6

Conclusion

BreadTalk Group is a consumer staples company with a strong growth strategy, especially in China. It aims to double its revenue by FY16E, with a focus on expanding its bakery, restaurant, and food court businesses. The company is undervalued, with a target price of SGD1.54, and is expected to see significant improvements in its EBIT margin and EPS growth over the next few years.

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