PETALING JAYA: Best known for selling spectacles, Focus Point Holdings Bhd
may soon have another earnings story to tell as its loss-making food and beverage (F&B) business shows signs of turning the corner.
The group operates Japanese concept bakery chain Komugi, but the F&B division has weighed on earnings, prompting Focus Point to shut underperforming outlets.
Hong Leong Investment Bank (HLIB) Research now believes an “imminent F&B turnaround” could be taking shape, driven not by opening more stores, but by supplying pastries to other businesses.
The biggest catalyst is a new contract with a major convenience store chain, where deliveries of Japanese pastry products have started across an initial 400 outlets, with the potential to expand to about 1,000.
Management expects the contract to generate RM9.6mil to RM12mil in annualised revenue, equivalent to roughly 22% to 27% of the F&B segment’s revenue in the financial year of 2025 (FY25).
HLIB Research said the additional volume could lift utilisation at Focus Point’s central kitchen to between 70% and 80%, allowing the group to benefit from better operating leverage without taking on the rental and overhead costs associated with opening more Komugi outlets.
“The latest contract with a large convenience store chain is the clearest catalyst from here, in our opinion,” the research house said.
Potentially more significant over the longer term is a deal with a Singapore coffee chain.
According to HLIB Research, Focus Point’s first shipment to the chain sold out within just three days, prompting a repeat order.
The arrangement could give the group access to a new export channel as the coffee chain expands both in Singapore and across the region.
Crucially, both contracts are supplied directly from Focus Point’s central kitchen.
For the convenience store contract, products are delivered daily to the customer’s distribution centre, while export orders for the Singapore coffee chain are collected by the customer. Either model avoids the heavier cost structure of opening additional retail outlets.
“Either way, incremental business-to- business volume carries a lighter cost base than further retail expansion,” HLIB Research said.
In the second quarter of FY26, F&B revenue fell 15.8% year-on-year (y-o-y) to RM9.4mil as underperforming outlets were closed, though segment losses narrowed 37.8% y-o-y to RM500,000 as the rationalisation took hold.
Nevertheless, Focus Point delivered a record first half of FY26, with profit after tax rising 12.6% y-o-y to RM18.7mil, underpinned by resilient optical demand.
HLIB Research has kept a “buy” call on the stock with a target price of 89 sen.
