KUALA LUMPUR, May 9 — Berjaya Food Bhd is expected to remain weighed down by overhang from geopolitical tensions, which will continue to dampen its performance in the near term, said Hong Leong Investment Bank Bhd (HLIB).
It said this was despite management focusing on cost efficiency, labour productivity, and targeted marketing to cushion the impact.
In a research note today, HLIB said that the group has opted to close underperforming stores amid challenging business conditions.
It noted that the total number of Starbucks outlets has declined to 376 following 20 closures, comprising eight in the central region, five in the southern region, three each in the northern and eastern regions, and one in Sarawak.
HLIB said it has revised its forecasts for the financial years 2025, 2026, and 2027 to losses of RM136.6 million, RM129.9 million, and RM118.5 million, respectively.
“Revenue declined by eight per cent quarter-on-quarter (q-o-q) to RM113.6 million, dragged by the ongoing consumer boycott of Starbucks linked to the Israel-Gaza conflict, coupled with a seasonally weaker period due to Ramadan and a shorter reporting quarter.
“On a year-on-year basis, revenue fell by 18 per cent, while year-to-date sales plunged by 40 per cent to RM360.9 million, largely due to a reduced number of operating outlets and sustained boycott pressure,” it noted.
HLIB maintained its “sell” call on Berjaya Food with a lower target price (TP) of RM0.21, down from RM0.23.
“Despite strong brand equity and active promotions, we opine the boycott headwinds will stay, at least for the near term, which will drag earnings,” it added.
Meanwhile, Maybank Investment Bank Bhd (Maybank IB) forecasts that Berjaya Food’s operating challenges will continue to persist, and it remains uncertain when the lingering effects of geopolitical tensions will fully subside.
Maybank IB maintained its “sell” recommendation with a lower TP of RM0.20, based on a calendar year of 2026 price-to-book value (PBV) of 1.3 times, which is one standard deviation below the historical mean.
At 10.51 am, Berjaya Food’s share price declined by one sen to 31 sen, with 324,200 shares traded.
— Bernama
