SDS Group
Posted: Mon Apr 27, 2020 9:17 amnot vested
Trading Buy: SDS – 0212
Rising demand for bread during MCO period*
(Last price: RM0.15, Potential upside +36.7%)
Company Profile
SDS Group is primarily involved in
(i) wholesale - manufacturing and distributing (over 10k customers) of bakery products (breads, buns, rolls and cakes) under the brand name of “Top Baker” and “Daily’s” and
(ii) retail - operating 33 food and beverages (F&B) outlets in Johor under the brand name of “S.D.S” and “Fanpekka Café by S.D.S”.
Trading Catalyst
We understand from several news media that shortages of bread during MCO have been quite serious. It suggests that people could be panic-buying or purchasing more than usual amount. Also, some of the bread factories have been operating at max capacity, which gives rise to people buying into other brands (i.e. Top Baker and Daily’s) and rather than the usual Gardenia or Massimo.
SDS has a fully automated bread factory in Seremban that is able to churn out 3,000 loaves per hour. Its distribution segment is contributing roughly 70% of revenue towards the group with c.30% gross profit margin.
Also, SDS has been expanding its footprint to the northern region earnings to grow moving forward.
Technical View
Resistance: RM0.17 / RM0.185 / RM0.205
Support: RM0.14 / RM0.135
Cut loss: RM0.13
Source: HLIB
Trading Buy: SDS – 0212
Rising demand for bread during MCO period*
(Last price: RM0.15, Potential upside +36.7%)
Company Profile
SDS Group is primarily involved in
(i) wholesale - manufacturing and distributing (over 10k customers) of bakery products (breads, buns, rolls and cakes) under the brand name of “Top Baker” and “Daily’s” and
(ii) retail - operating 33 food and beverages (F&B) outlets in Johor under the brand name of “S.D.S” and “Fanpekka Café by S.D.S”.
Trading Catalyst
We understand from several news media that shortages of bread during MCO have been quite serious. It suggests that people could be panic-buying or purchasing more than usual amount. Also, some of the bread factories have been operating at max capacity, which gives rise to people buying into other brands (i.e. Top Baker and Daily’s) and rather than the usual Gardenia or Massimo.
SDS has a fully automated bread factory in Seremban that is able to churn out 3,000 loaves per hour. Its distribution segment is contributing roughly 70% of revenue towards the group with c.30% gross profit margin.
Also, SDS has been expanding its footprint to the northern region earnings to grow moving forward.
Technical View
Resistance: RM0.17 / RM0.185 / RM0.205
Support: RM0.14 / RM0.135
Cut loss: RM0.13
Source: HLIB