Food Services - RHB Invest 2024-04-24: Prefer More Defensive Formats; Maintain NEUTRAL

Food Services - Prefer More Defensive Formats; Maintain NEUTRAL

Kimly (SGX:1D0) | SGinvestors.ioKimly (SGX:1D0) JAPAN FOODS HOLDING LTD. (SGX:5OI)
  • We make no change to our NEUTRAL weighting for the Singapore downstream F&B food services sector. We have a BUY call for Kimly and a NEUTRAL rating for Japan Foods.
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    • We remain cautious on Japan Foods (SGX:5OI), amid anticipated operating margin pressure vs a slightly stretched valuation.

Singapore Department of Statistics’ (SingStat) Food & Beverage Services Index has done well in recent months.

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  • January’s F&B food services index declined 6.3pts y-o-y to 107.6pts (2017: 100pts), while February’s sales surged 14.8pts to 115.2pts over the same period. Accounting for the difference in timing of both years’ Lunar New Years, both January and February’s F&B food services index collectively increased 8.5pts on the index, over the last year.
  • The buoyant consumption momentum following consecutive months of y-o-y improvement bodes well for F&B food service retailers.

Halal segment still in expansion mode.

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Alfie Yeo RHB Securities Research | 2024-04-24

More views on outlook of consumer sector:
Analyst Reports on Singapore Consumer Sector


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