BreadTalk share price lost steam

What a revelation. Investors must have that “uh-oh” feeling as BreadTalk share price plunged by 39% since reaching a record high in July 2018. It has been nearly 2 years since I last covered BreadTalk share price. Back then, I predicted that BreadTalk share price would be bullish with the purported property divestments.

Indeed, since that article, BreadTalk had enjoyed a splendid bullish spell in 2018. But as the saying goes, what goes up must come down. This is the case for BreadTalk share price, which spiralled out of control from the peak of July 2018.

BreadTalk share price

Following the stock split of 1-into-2 shares in May 2018, BreadTalk share price went into some sort of concussion and subsequently lost its bullish momentum. What could have led to the devastating meltdown of BreadTalk share price and what is the outlook for this homegrown counter?

BreadTalk share price thrashed

Every dog has its day. BreadTalk share price used to be one of the top dogs in SGX, hitting a pre-split of $2.50 on 3 July 2018. But the dynamics for this counter had changed swiftly. In the blink of an eye, BreadTalk had transformed into a dead stock, with average 3-month trading volume of merely 6.2 million. For the past 12 months, big boys had also gave this counter the cold shoulder, with minimal buying and selling interests. Apparently, the fiery form of BreadTalk share price had fizzled out.

In my previous article in 2017, I warned that the bullish form of BreadTalk share price would not be sustainable because it was not built on business fundamentals. Evidently, investors still see BreadTalk as a food and beverage player and any further good news from property divestments would unlikely to fuel bull run in BreadTalk share price.

It seems that the management has shot itself in the foot by delivering a subpar performance for full-year FY2018. And this explains the bearish form of BreadTalk share price. Revenue remained flat at $609 million while net profits collapsed 33.7% to $19.7 million. BreadTalk then delivered another dismal performance in 1QFY2019 that saw revenue increasing 6.1% to $157.6 million and net profits nose-diving 66.5% to $1.2 million. These results really knocked the wind out of BreadTalk share price.

With such terrible financial performances, it is no wonder that BreadTalk share price got thrashed left, right and centre. Although the main bulk of BreadTalk’s revenue is [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: August 1, 2019 — 3:01 pm

2 Comments

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  1. Many thanks, Gerald, for getting this article written/published so fast.

    Guess the PE is a little outdated. Bloomberg reports it’s around 26.

  2. Hi Leo,

    Thank you for pointing out. I have updated the PE accordingly.
    As expected, the 1HFY2019 is disappointing. Net profits plunged by 59% on year-on-year basis.

    Regards,
    Gerald
    https://sgwealthbuilder.com

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