We remain positive on Kimly (SGX:1D0). Despite missing our estimates for FY23, Kimly continues to be profitable and cash generative, paying around 60% of dividends as earnings. We see growth driven by new outlets, especially in the halalsegment.
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Outlook for more coffee shop outlets.
There is a robust outlook for more outlets with the number of the Housing & Development Board’s (HDB) new supply of eating houses available for tender in the next six months – this amounts to four island wide. Locations include Sengkang, Jurong West, Punggol, and Tampines.
There will also be four additional new eating houses from 2HCY24, which are planned for release by the HDB at Kallang/Whampoa, Tampines, Tengah, and Woodlands. This brings the total number of new HDB eating houses available for bidding to eight.
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F&B food service sales expected to remain healthy in CY24.
Post COVID-19 reopening, consumption appetite for the F&B food services have markedly improved. Singapore’s Food & Beverage Services Index (CY17=100) for other eating places recovered in CY23 to 107-124 points, compared to 89-117 points in CY22. This has already exceeded the pre- COVID-19 level of 91-107 points in CY19. As such, we expect the healthy F&B sales in 2023 to continue at elevated levels in CY24.
FY23 earnings below estimates.
Read more at SGinvestors.io.
Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
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