BreadTalk: 2Q10 results below expectations. Despite the double-digit increase in revenue across all business segments and geographies, net profit was down 24% yoy to $2.3m. Profitability was crimped by start-up losses from new restaurant brands, such as Ramen Play and Carls Junior. We also note weakness in the bakery business as its bakery units in Hong Kong and China posted less-than-satisfactory performance.
We slash our FY10 earnings estimates by 18%, and cut our target to $0.66 from $0.70. Downgrade to HOLD.
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