SEE:Despite weaker results, DBS still likes Koufu as a recovery play
On the other hand, PhillipCapital has downgraded its call on Koufu to “accumulate” from “buy” previously with a lower target price of 68 cents from 77 cents previously. Although there have been improvements in footfalls in Singapore and Macau and the group is marked for recovery in 2HFY2020, the consumption recovery may be slower than expected. Due to work from home being the default arrangement, consumption recovery at food courts near offices, downtown and in tertiary institutions remains slow. Meanwhile, the group’s expected TOP of its integrated facility (IF) is delayed again to 1QFY2021, due to Covid-19 slowing down the shipment of building materials from Malaysia to Singapore. Management now expect to move into the IF and commence operation in 2Q2021. Analyst Terence Chua says, “We continue to remain positive on the group’s outlook post circuit breaker. We believe the recovery in consumption post circuit breaker will continue to improve footfalls and revenue of the food courts and coffee shops in 2021. We expect the completion of the Group’s new IF in 1QFY2021 to yield cost savings and provide an additional revenue source from the rental of the balance 25% space.” As at 4.15pm, shares in Koufu are trading at 66 cents or 3.3 times FY2021 book with a dividend yield of 3.7%, according to CGS-CIMB’s estimates