CIMB Investment Bank Bhd (CIMB Securities) has maintained its HOLD call on Berjaya Food Bhd with an unchanged target price of RM0.21, saying the disposal of its 50% stake in loss-making Berjaya Paris Baguette for RM1 is incrementally positive for the group’s turnaround story, while noting no material impact on earnings given the investment has already been fully impaired.
The research house said Berjaya Food disposed of its 50% stake in Berjaya Paris Baguette to Paris Baguette Singapore on 30 June 2026, with the bakery joint venture having remained loss-making since its launch in January 2023. Losses widened to RM7.0 million in the first nine months of financial year 2026 compared to RM3.4 million a year earlier, making it a continued drag on group performance.
CIMB Securities noted that Berjaya Food’s original investment cost of RM20 million had already been fully impaired, limiting the near-term profit and loss impact from the exit. It added that the group also settled RM3.9 million of liabilities as part of the transaction, while no additional liabilities were assumed.
Despite the disposal, the research house said Berjaya Food still retains exposure to other regional Paris Baguette joint ventures, including a 60% stake in the Philippines and a 70% stake in Brunei, suggesting selective rather than full withdrawal from the brand’s regional expansion.
The exit is viewed as supportive of Berjaya Food’s broader restructuring efforts, with CIMB Securities highlighting that the group is focusing on its core Starbucks Malaysia business, which remains its key earnings driver with 301 stores as at 30 June 2025.
While the disposal is seen as a step towards streamlining operations, CIMB Securities kept its forecasts unchanged, saying it had already assumed minimal contribution from the joint venture. The research house maintained that valuation remains fair and reiterated its view that the worst of the earnings drag may already be behind the stock.
Berjaya Food’s stock price drops 2.56% to RM0.19 as of 11.14 am.
