It is rather difficult to project earnings beyond 1 year, which is what I learned from Lee metals and silverlake axis, Yet, because of the "unqiue" or "unfortunate" circumstances of Covid-19, it is quite possible that we can project 2 consecutive years of growth.
2020, is a recovery year from a low base, with 2021 being a "growth" year, just by the virtue of execution of shelved plans.
1) In their updates, H2 is already better than H1 due to Phase 2. Yet, we know the F&B retailing segment will still be mostly constrained by the WFH affecting stalls' business at those near office and tourist attraction and also by the maximum of 5 people capacity
2) 2021 is a recovery year, due to a low base effect, it is a no brainer that earnings will be better.
3) Assume vacination rollout is successful and most countries have significant of their population vacinnated in 2021, 2022 could see more "normalisation" of business conditions.
4) Growth in2021, should come from the successful cost reduction when Asia Deli, and their existing factories are sold when the integrated facility becomes fully operational and their reduncies in P&E get disposed. Depreciation is the largest expense for Koufu. 2021, numbers will be drag down by their higher numbers in depreciation before their dispose of their existing factories.
5) The 2 growth areas of "R&B" tea is the area where the strategy is getting clearer. Instead of owning the brand and going it alone, they are going for partnership and reduce on cost by selling the products on existing stalls of partners.
6) Product diversification and snergy with deliAsia group companies. In 2018, they made 2 mio profits. I believed they maybe loss making in 2020, but I do notice the presence of dough culture and heritage shops. They intend to increase the shops 4 folds over 5 years.
RISK: Sudden dearth of successful bidding of food courts.
2020 is obviously gone, demand is almost halved. I hardly believe 2021 will be able to fulfilled all pent up demand, especially with labour an issue. Genting and MBS expansion plans could possibly only materialised in 2021 (Not in BCA forecast)