KUALA LUMPUR: Berjaya Food Bhd (BFood) profitability will continue to be driven by the opening of 25-30 new Starbucks outlets annually.
Hong Leong Investment Bank (HLIB) Research said BFood take up for takeaway and drive-through have been robust during movement control order (MCO) 2.0.
The online delivery sales have spiked to the range of 20-30 per cent of revenue contribution during the current conditional movement control order (CMCO), it said.
"However with the easing of restriction and normalisation of 100 per cent office capacity from April, management expects this to trend lower at 10 per cent as store footfall is expected to recover.
"We are still positive on Starbucks which continues to grow via new outlet openings and higher sales from active promotions and continual innovative products," it said.
Meanwhile, HLIB said a leaner concept KRR store would also enable BFood to continue maintaining its profitability.
"In light of increasing popularity for take-away, Berjaya Food has launched KRR cloud kitchen in Grab Kitchen and Panda Kitchen to cater to the demand.
"We understand that this concept serves the KRR menu without the existence of a physical store, requiring only minimal capex of a regular store's start-up," it said.
As for Latin-inspired, tex-mex restaurant chain Sala, the firm said despite being at a nascent stage with the growing popularity among health conscious consumers, it opine this would be a worthwhile venture for the group.
While still a small part of the business, the firm reckon this venture has potential, given the rise in popularity of plant based eating habits, it said.
"At this juncture, the prospective new stores are targeted to open within the Klang Valley vicinity. We reckon that these will boost Bfood's diverse offerings with the growing health consciousness among the urbanites.
"We downgraded our rating to Hold from Buy on BFood with a lower target price of RM2.10 from RM1.78," it added.