Food Junction

[pianist]

Today (13Dec10), the company bought back another 367 lots from the open-market at $0.205/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
Based on the total 1836 lots done today within the price range $0.205 - $0.22, with the bulk done at $0.21, we can draw 2 conclusions -
1. Food Junction did not try to support the share price.
2. There are many others (including me!) who managed to pick up some cheap Food Junction shares today.

thanks for sharing your thoughts. i am amazed by your evaluation of this counter despite me noting its roe, pe and gross margin arent that very nice-looking at the moment.
i have missed out on the way u compared its market capitalisation against its revenue. however i dun understand the applications/implications of comparing its replacement cost of f&b foodcourts outlets against its market capitalisation. would you able shed more light on this comparison? thank you.

on a peer comparison basis, it just rang a bell in my head to compare with the recent run-up thai village..though not exactly a 100% good comparison, however i noted that thai village is probably more expensive than foodjunction at this moment...even though it has lesser outlets compared to the more established food junction..thai village is trading above its nav now.

i again pre-set my buy orders on yesterday sunday and jut discovered they were all filled up..

[cif5000]

Just wondering...if I were a mall and I want a food court operator, would I care if they have 80 or 8 other locations? If I have a Kopitiam card and I am in the mall with a Food Junction, would I choose not to eat there if I intend to go food court?

I don't know.

If I were a mall...
then No. I wouldn't care how many locations the operator has. I probably care more about how well the operator operates the food court. What are the kind of stall-holders the operator attracts to rent stalls in the food court.

IMO, Kopitiam does a terrible job at attracting good stall holders.

If I were a shopper in a mall and intend to eat at a food court...
Nope too. Wouldn't skip it just because it's a FJ instead of a Kopitiam.

So, wouldn't the economics of a food court operator be similar to...eh, a property developer in Singapore? Well, I say Singapore because you are as (un)likely to get a food poisoning from a FJ food court as to a FR food court.

You bid, you set it up, you sell - project base.
Bid - land; mall
Set up - design, construction, renovation
Sell - property buyers; stall operators
Of course, they also operate the stalls themselves, just like the property developers hold investment properties.

A successful bid for a prime land at cheap price doesn't guarantee the next bid to be successful. There are premium names like Far East (very popular among foreign investors) but the track record / brand of a food court is not as strong yet for any of the local players. Anyone can tender with a fanciful proposal and win the bid, but will it make money for the shareholders? Food court design, how innovative can it get?

[nutty]

I think new management and their strategy moving forward will play a big part.

I know of people working there few years back under the old management team. They seem to be a bunch of clueless "senior management" with ideas that ended up as failed ventures.

For example, they opened up a "luxury store" selling Japanese souvenir crackers at Great World City. If my memory didn't fail me, one pack cost about $40. Fancy buying keropok for $40? Who will wanna buy? Tourists wouldn't buy them back and neither will locals.

I believed it has closed down since and was replaced by "So EZ Cooking Studio", providing culinary course for enthusiasts. Again, I'm not too convince that this will work. A two-hour chinese culinary course cost $95, and a two-hour Japanese cooking lesson cost $128. Perhaps it is only afforable for Tai tais?

[dydx]

i have missed out on the way u compared its market capitalisation against its revenue. however i dun understand the applications/implications of comparing its replacement cost of f&b foodcourts outlets against its market capitalisation. would you able shed more light on this comparison? thank you.

Food Junction's well-established food court operation is a sustainable cash-based business. It is therefore reasonable to expect owners or investors of food courts to use revenue base - including current revenue as a base, plus any potential for increase in the future - as a key yardstick to value such a business.

Food Junction is also quite an old company, and the original (or historical) investment costs of its 18 existing food courts and other F&B outlets have been written down over the years through accounting depreciation, to $8.44m as relected under current Fixed Assets (as at 30Sep10). What I am saying is that the total replacement cost - at current prices - of building up the existing 18 food courts and other F&B outlets is likely to be higher than Foint Junction's current market cap. of $27.0m, bearing in mind a new well-designed good-size food court should cost anything up to $3.0m (or more for those with a special theme) to establish.

[pianist]

What I am saying is that the total replacement cost - at current prices - of building up the existing 18 food courts and other F&B outlets is likely to be higher than Foint Junction's current market cap. of $27.0m, bearing in mind a new well-designed good-size food court should cost anything up to $3.0m (or more for those with a special theme) to establish.

i see thanks for putting it in a clearer light...hmm..does this means a new food court entrant instead of starting up costly foodcourts, may turn to FJ as an alternative cheaper route..wow then...FJ could be a potential takeover...

[pianist]

anyone is a member of FJ ($5 for a 2 year membership)?
FJP Cardholders are entitled to:
- 10% discount for Food Junction brands such as Food Junction, Food Culture, Food Place, and Toast@Work.
- 5% discount for Tetsu and SoEZ Cooking Studio.
seems like a good deal

[nutty]

Not really a good deal when Kopitiam offers their membership for free.

I hope FJ will follow the same.

[chang]

Not really a good deal when Kopitiam offers their membership for free.

I hope FJ will follow the same.

u have to pay $2 for the card, and it expires every 2 years.

[dydx]

anyone is a member of FJ ($5 for a 2 year membership)?
FJP Cardholders are entitled to:
- 10% discount for Food Junction brands such as Food Junction, Food Culture, Food Place, and Toast@Work.
- 5% discount for Tetsu and SoEZ Cooking Studio.
seems like a good deal

For those who live or work near a FJ foodcourt and enjoys eating there, the discount card sure makes sense. The $5 fee for the 2-year membership covers basically the related administrative costs and presumably also the costs of promotional meterials/messages sent to the cardmembers.

Just like any membership progarmme, FJ is trying to use the card to promote regular patronage from cardmembers, and those cardmembers who eat regularly at FJ outlets will benefit the most from the price discounts and other promotions.

[pianist]

FJ announces INTERESTED PERSON TRANSACTION – TENANCY AGREEMENT ENTERED INTO WITH
SHANGHAI LIPPO FUXING REAL ESTATE LIMITED http://info.sgx.com/webcoranncatth.nsf/V...00031D47B/$file/Announcement_IPT_Tenancy_Agreement.pdf?openelement

similar biz concept as what they recently deal with that Lippo Chiuchow Restaurant in Hong
Kong in recent months..seems like they are executing their planned strategy in steps in east china