RHB Group Research analyst Jarick Seet has kept his “buy” call on Kimly with an unchanged target price of 46 cents after the coffeeshop operator decided not to engage former executive chairman Lim Hee Liat and former executive director Chia Cher Khiang as its independent consultants.
While Kimly had previously wanted to continue tapping the duo’s experience and expertise following their conviction for breaching the Securities and Futures Act (SFA), the group’s stakeholders felt otherwise.
Both men own a combined stake of 41.3% in the coffeeshop operator.
In his report dated March 15, Seet remains positive on Kimly’s outlook as he sees the resolving of Lim and Chia’s case with the commercial affairs department (CAD) as “a new era”.
“The end of this challenging period should be positive for Kimly in the long run, as it should finally remove the overhang on the company’s outlook,” he writes.
“It also opens the door for management to reshuffle its team, and move forward with its growth strategy,” he adds.
Despite Kimly’s decision to can its plans to engage Lim and Chia as independent consultants, Seet believes that Lim is likely to continue to share his expertise and experience with the company “in some capacity”.
“From the recent privatisation of its peer Koufu at 16x FY2022 P/E, Kimly is now trading at a much lower 11x FY2022 P/E,” notes the analyst. “Due to its acquisition of Tenderfresh as well as its further plans to expand the number of its coffee shops, we remain positive on the group.”
As at 12.49pm, shares in Kimly are trading 0.5 cent lower or 1.28% down at 38.5 cents, or an FY2022 P/B of 3x and a dividend yield of 5.7%.
Photo: Albert Chua/The Edge Singapore
