Analysts upbeat on Focus Point’s prospects, F&B segment growing
KUALA LUMPUR: Analysts are feeling upbeat about Focus Point Holdings Bhd’s (Focus Point) prospects moving forward, backed by the group’s growing food and beverage (F&B) segment.
The research arm of Hong Leong Investment Bank Bhd (HLIB Research) gathered that the reimplementation of the Movement Control Order (MCO) 2.0 restrictions in January resulted in lower foot traffic in retail areas in January-February, impacting Focus Point’s optical division (which was lower by approximately 20 per cent).
“However, management guided that sales picked up in March, which was very strong that chalked in record high sales in both the optical and F&B segments,” HLIB Research said following a conference call with Focus Point.
“Management is targeting to further expand optical outlets in East Coast area and we gather that demand for optical products have been robust aided by the introduction of i-Sinar.”
According to HLIB Research, with increasing order volumes from existing clients and apparent interests from new clients, Focus Point’s current central kitchen (CK1) has reached maximum capacity.
By year-end, the research arm estimated Focus Point’s second central kitchen (CK2) to have an utilisation rate of 30 per cent based on increased orders from existing customers as well as new clients coming on board.
“We gather that CK2 will be able to generate up to approximately RM5 million sales per month from corporate sales at maximum capacity and Focus Point expects ISO22000 certification for CK2 to be granted by the end of third quarter of 2021 (3Q21).”
On new corporate clients, HLIB Research recalled that Focus Point will start supplying to Customer S starting in May.
“Currently scheduled at four stock keeping units (SKUs), the revenue is estimated to be in the range of RM100,000 to RM200,000 per month.
“We understand that Focus Point is in discussion with Customer S to increase the number of SKUs to cater to its large number of cafe outlets.
“Additionally, Focus Point recently secured domain driven design (DDD) to supply three products. Delivery is scheduled to start end of April with RM90,000 revenue per month.”
The research arm opined that this could have the potential of being one of Focus Point biggest corporate clients in light of DDD blooming interests from the public.
“As for Tea customer, Focus Point will supply room ambiance products (such as dry cakes, Danish pastries and others) by 3Q21.
“For the Singaporean client, the group expects to start delivery in 4Q21 following the approval of ISO22000 certification.”
In addition, HLIB Research gathered that Focus Point’s largest client continues to increase order volumes (10 SKUs currently) as it is aggressively opening more outlets.
“The group is currently in preliminary discussion with Customer A (Japanese retail giant) and a petrol station conglomerate to supply some of their products.
“As for Komugi, three additional street shop concept stores are currently in the pipeline.”
The research arm is 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.