by NURUL SUHAIDI / pic by TMR FILE

HONG Leong Investment Bank Bhd (HLIB) has maintained its ‘Buy’ rating on Focus Point Holdings Bhd as it believes the group will experience a strong rebound in its business driven by its corporate client utilisation and recovery in footfall traffic.

HLIB’s analyst Syifaa’ Mahsuri Ismail said Focus Point is still expanding its optical, and food and beverage (F&B) segment outlets.

For financial year 2022 (FY22), Focus Point is set to open a new optical store known as Anggun Optometrist which aims to cater to the mid-high end Malay market.

For this venture, the group’s management expects ticket size to be higher from this target market.

“The expansion in optical business will enable the group to bargain for higher rebates from its key suppliers which are mainly the established foreign brands,” the investment bank report on Focus Point yesterday stated.

HLIB gathered five locations have been secured for new outlets with Focus Point having a target to rollout 12-15 stores for FY22.

As for the new venture in Excelview Laser Eye Centre, the group has equipped its centre with advanced machinery to perform special lasik operation.

Focus Point’s sales to corporate clients continue to gain traction with two new corporate clients secured recently.

The group’s F&B segment revenue is expected to expand further from higher corporate sales and stable contribution from the recently launched Komugi outlets in 1Utama and USJ Taipan. The company now has 11 such outlets.

Focus Point’s F&B segment’s main corporate client consistently contributes between RM1.5 million to 1.6 million in sales per month for a total of 14 stock-keeping units.

“We anticipate this organic growth to sustain from the expansion of outlets and vending machines by the customer. Domain driven design targets to open another two outlets for FY22 and we expect orders to be healthy,” the analyst wrote.

HLIB noted that Focus Point’s Central Kitchen 2 (CK2) has acquired the ISO22000 certification and is still pursuing the same certification for CK1.

“We are optimistic about this development as this would open doors for Focus Point to secure new business with an established convenience store chain in Singapore.”

CK2 is currently at 50%-60% capacity and with a rapidly growing corporate client base and management plans to increase CK2 capacity by 10%-20% to accommodate Baumkuchen products.

“We remain confident on Focus Point’s scalable business model as we reckon that both optical and F&B segments are able to ramp up fully once operating conditions normalizes,” HLIB noted.

Hence, HLIB has maintained a ‘Buy’ rating on the group with an unchanged target price of RM1.03 pegged to 22 times price-earnings of FY22 earnings per share.

It also highlighted the fourth quarter was seasonally the strongest quarter for Focus Point, historically making up close to 50% of its full year earnings.