“We are seeing a strong rebound in operating performance as most of its underlying businesses are doing well,” says DBS lead analyst Rachel Tan in a flash note on Thursday.
DBS is keeping its “buy” call on Yoma with a price target of 80 cents.
While Yoma saw its FY17 earnings slip 3.2% to $35.9 million due to higher interest expenses and administrative expenses, group revenue grew 11% to $124.2 million on the back of its non-real estate segment.
Revenue from its automotive and heavy equipment business grew 27.2% to $38.1 million, driven by New Holland tractors.
“Yoma will also launch a new heavy equipment arm – JCB equipment – and should see positive contribution in the medium term,” says Tan.
Meanwhile, revenue generated from the group’s consumer business, which comprises its KFC franchise operations, more than doubled to $10.9 million in FY17 with new store openings.
On the property front, Tan says active marketing at existing real estate projects is expected to drive sales.
“Most importantly, 4Q17 gross profit of $21.6 million covers the group’s overheads of close to $14.3 million, implying that operating performance has achieved a sustainable level,” Tan says.
As at 11.39am, shares of Yoma are trading 2.5 cents higher at 60 cents.
