With the recent scandals over its 'freshly prepared' soya milk, etc, will BreadTalk lose customers in significant numbers? The share price has weakened a little bit from $1.42 about 2 weeks ago, and is trading at 29X PE @ $1.34. Not excessive for a F&B business but not enticing at all to value investors.
Bun sale & soya milk sale may be affected going fwd but not significant at group level as it has many other offerings --- Ramen Play, Food Republics, Toast Box, Ding Tai Feng, Icing Room, Carls Junior. .
In an SGX filing on Jan 16, it blames the likely losses to the following factors. First, it will suffer wider losses at its bakery business in China and Thailand.
Next, it is likely to suffer losses at its so-called 4orth division, due to a “challenging operating environment.” This 4orth division houses the operation of BreadTalk’s new brands such as Wu Pao Chun, Song Fa, Tai Gai and Nayuki.
Last but not least, BreadTalk blames the recent unrest in Hong Kong to cause “significant deterioration” in the financial performance of its bakery and food atrium divisions in the former British colony.