FOCUSP (0157) FOCUS POINT HOLDINGS BHD on strong footing
PETALING JAYA: Focus Point Holdings Bhd will likely see a stronger performance for the financial year ending Dec 31,2021 (FY21), boosted by higher sales in both its optical and food and beverage (F&B) segments.
The eyewear retailer, which is also involved in F&B activities, has reportedly posted record high sales for the two business segments in March.
The group’s second central kitchen is already up and running, and the management expects the ISO22000 certification to be granted by end-September 2021.
Focus Point, which has thus far secured three new customers, is currently in talks with another two potential customers for the operation.
Hong Leong Investment Bank (HLIB) Research, which held a conference call with Focus Point, noted that it came away feeling upbeat about the group’s prospects.
The brokerage maintained “buy” on Focus Point, with a target price of RM1.11 based on 22 times forward earnings.
Focus Point saw its net profit increase 7.6% year-on-year (y-o-y) to RM10.6mil in FY20. Its revenue, however, fell 16.4% y-o-y to RM159.6mil.
“Increasing F&B corporate sales and the commencement of a second central kitchen should see profitability of the F&B division accelerate. Furthermore, we reckon the possibility of securing new F&B corporate clients given the popularity of their current product offerings, ” HLIB wrote in a report.
It noted that Focus Point saw a decline of around 20% in the optical division in January-February period following the implementation of the second movement control order, or MCO 2.0, which resulted in lower foot traffic in retail areas.
However, management guided that sales picked up in March, HLIB said, chalking up record high sales in both the optical and F&B segments.
“Management is targeting to further expand its optical outlets in the East Coast and we gather that demand for optical products have been robust, aided by the introduction of the i-Sinar (programme), ” it said.
HLIB noted that Focus Point’s first central kitchen had reached maximum capacity, and by year-end, the second central kitchen could have a utilisation rate of 30%, based on increased orders from existing customers as well as new clients coming on board.
It said the second central kitchen could generate up to RM5mil per month from corporate sales at maximum capacity.
HLIB noted that Focus Point was in talk with its “Customer S” to increase the number of stock-keeping unit (SKU) to cater to its large number of café outlets. The group is expected to start supplying “Customer S” four SKUs next month, with revenue expected to be in the range of RM100,000 to RM200,000 per month.
As for another new customer, “DDD”, Focus Point is expected to start delivery of three products in April, with RM90,000 revenue per month. As for a tea customer, Focus Point would supply room ambiance products such as dry cakes and Danish pastries by the third quarter.
“Focus Point’s largest client continues to increase order volumes (10 SKUs currently) as it is aggressively opening more outlets, ” HLIB said.
“The group is currently in preliminary discussion with ‘Customer A’ (a Japanese retail giant) and a petrol station conglomerate to supply some of their products, ” it added.
HLIB said Focus Point had three additional street shop concept stores in the pipeline for its Japanese bakery Komugi.
“We are positive on the strategy of moving towards street shop concept, as they will ease the accessibility in residential area while lower rental rates could boost Komugi’s contribution, ” it said.