BreadTalk

BreadTalk: Revealed plans to achieve $1b in revenue within the next three years, and expand its network to more than 2,000 outlets across all its business segments in five years, surpassing its previous target of 1,000 shops by 2015. This comes as it unveiled its newly opened international headquarters at 30 Tai Seng Street, which will house the group’s corporate office, R&D, training academy, central kitchen and warehouse facilities. Regarding Thailand’s Minor group, who now holds abt 11% stake in Breadtalk, the group hopes for a brand to cooperate with them and is still exploring that possibility with them. If Minor group can add value, do not rule out the possibility of a joint venture to expand even faster there. Breadtalk, however was quick to dispel speculation of a possible takeover. Note that while the grp frequently get a lot of people knocking on the door to ask if we want to sell the company or give up part of its stake. As the majority shareholder and founder, they have never thought of selling their stakes. In recent transactions, M&A deals in the F&B sector translates to a P/E of ~30x. At current price, BreadTalk trades at 19.6x forward P/E, which does not appear excessive, in light of recent M&A transactions within the Asian F&B sector, and in consideration of the high growth markets which the group operates in.