Brokers' take
Add BT as a preferred sourceBreadTalk Group > Buy June 9 close: S$1.66 Target price: S$1.92 DBS Group Research, June 9
WE reiterate "buy" on BreadTalk as we believe its earnings will continue to turn around and deliver growth. Q1 2017 earnings have validated that its food court business is on track for a turnaround.
Apart from earnings growth, we see potential catalysts from the possible sale of AXA Tower /CHIJMES and revaluation of Beijing Tongzhou Development. BreadTalk's valuation, based on its core business (ex-property investments), is compelling at 16.2 times 2017/18 forecast earnings. We believe consensus has yet to factor in BreadTalk's investment properties into its share price.
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