Leong Hup's downstream move opens up new demand avenue

KUALA LUMPUR: Leong Hup International Bhd's acquisition of The Baker's Cottage Sdn Bhd has positive synergies as it will allow the group to move downstream and open up a revenue stream for its poultry products, says Maybank Investment Bank research.

The research house, which maintained its "sell" recommendation on the stock, said the venture into the quick-service restaurant business will open up a new demand avenue for its poultry supply, increase its customer base and benefit from economies of scale.