Growth for QL Resources will come from its convenience store business and QL food supply business.
PETALING JAYA: QL Resources Bhd
’s business prospects for financial ending March 31year, 2024 (FY24) will be supported by good demand for its poultry products business and growth of its convenience store business.
MIDF Research, after a meeting with the company, noted that the company’s chicken egg supply business in Malaysia would likely enjoy continued subsidised prices for eggs in the local market in the near term while the fallout with its Indonesian egg supply business was manageable.
“Based on our channel check, price control and subsidies for eggs continued to be in place in 2023 partly due to the tight egg supply in Malaysia.
“The group highlighted a decrease in demand from McDonald’s Indonesia following the Indonesian consumers’ boycott of Israeli products in support of Palestine. However, the order is normalising recently, and the impact is manageable, considering that McDonald’s Indonesia is not a key customer in the Indonesia Integrated Livestock segment,” the research house stated in a report on the company.
Growth for QL Resources will come from its convenience store business and QL food supply business. The group planned to expand its network of Family Mart and Fami CAFE outlets in the northern region and the east coast.
As of its second quarter ended Sept 30, (2Q24) QL Resources had 379 Family Mart and Fami CAFE outlets with FM Mini comprising 84 outlets.
It aimed to surpass 400 stores but the expansion of FM Mini would continue at a slower pace.
“Moving forward, the group anticipates the convenience store segment’s top line and bottom line to continue to grow, supported by both the expanding number of stores and ongoing efforts to improve operating efficiency,” MIDF Research stated.
The group has also moved to supply in-flight meals to MAS Awana Services Sdn Bhd in the 3Q24 using its QL Central Kitchen facility which has more than sufficient capacity to undertake this business.
QL Kitchen is one of the 10 partners awarded the contract to cook and freeze the food, then deliver it to MAG Catering Operations, and finally, to the Malaysia Airlines.
“QL Resources has ample production capacity for inflight hot food. QL Central Kitchen can supply hot food to 600 Family outlets, despite having only 379 outlets.
“We are positive about this development for QL Resources as it enhances the factory’s utilisation rate,” the research house noted.
It added the venture signified potential for a new market and future revenue.
MIDF Research has maintained its “buy” call on QL Resources with an unchanged target price of RM6.25 a share
