BreadTalk's growth to be driven by margin expansion even with rising interest costs, says DBS

SINGAPORE (May 9): DBS Vickers Securities is maintaining its “buy” call on BreadTalk Group while lower its target price on the counter from $2.05 to $1.98 after factoring in higher interest costs from increased borrowings due to the group’s ongoing business expansion.

This is because BreadTalk is planning to build a larger central kitchen in Shanghai to cater to its future China expansion plans, while higher borrowings are also anticipated from a $100 million increase in the group’s medium-term notes.