RHB Group Research analyst Jarick Seet has maintained his “buy” rating on Kimly with a higher target price of 48 cents from 42 cents previously.
This comes as Kimly’s share price saw an upside of about 30% since March.
To Seet, Kimly has an attractive yield of 5% for the FY2021.
It also has a resilient business that is expected to remain “strong” during the Covid-19 pandemic, and “it will likely continue to reward [its] shareholders with attractive dividends,” he writes in a June 30 report.
Furthermore, the coffeeshop operator looks set to see revenues recovering to pre-Covid-19 levels along with a rise in its food delivery revenues amid the gradual reopening of the economy.
On this, Kimly’s profitability for the 2HFY2021 ending September should “remain strong”, estimates Seet.
This is due to the gradual economic recovery which could see more crowds returning to its coffee shops.
Revenue for its food delivery business may drop but will still be at a “much higher level” compared to Kimly’s pre-Covid-19 figures.
To be sure, Kimly saw 14.2% higher revenue for the 1HFY2021 of $122.6 million and 106.2% y-o-y higher PATMI of $21.7 million during the period.
In the same report, Seet also noted that Kimly may add another $9 million to its profit before tax (PBT) for the FY2022 due to its acquisition of homegrown food business, Tenderfresh. The group says it aims to complete the proposed acquisition in the next three to four months.
“[The] $9 million earn-out PBT, of which management is confident the target can be achieved, which will add about $5.5 million (22%) to net profit from FY2022 onwards,” notes Seet.
The acquisition of Tenderfresh will also mark an expansion for Kimly into new market segments, including the halal food segment.
Shares in Kimly closed 0.5 cent lower or 1.3% down at 39.5 cents on June 30, representing 3.8 times P/B, according to RHB’s estimates.
Photo: Kimly
