PhillipCapital is initiating a “buy” call on food court operator Koufu with a target price of 80 cents.

In an Aug 5 report, analyst Terence Chua views Koufu as best in class with a defensive business model and superior growth profile from their overseas expansion plans and the expansion of their new concepts (R&B Tea and their premium vegetarian Elemen restaurants).

Although given the current economic climate, Koufu is expected to be more cautious with store openings for FY20 and FY21. Koufu opened one new R&B tea kiosk (Eastpoint Mall) and two coffee shops (Blk 602 Tampines Avenue 9 and Blk 215C Compassvale Drive) in the first quarter of 2020. For the rest of 2020, the opening of two new food courts and two new R&B tea kiosks initially slated for opening in the second quarter of 2020 has been moved back to the third quarter of 2020 tentatively.

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