BreadTalk Group Limited (SGX:5DA) – More Than Just A Simple Bread Shop!


BreadTalk, Food Republic, Toast Box, and Din Tai Fung. Other than the fact that all their products fill our bellies, what do they have in common?

That’s right! They are ALL under the BreadTalk Group Limited (SGX:5DA) group of companies.

BreadTalk’s Humble Beginnings

Founded in 2000 as a simple bakery chain, BreadTalk has come a long way within a short period! During their IPO in 2003, BreadTalk had only 23 retail outlets (1 Franchised) generating a FY2003 Rev of S$40mil and a Net profit of S$1mil.

Fast forward to FY2013. BreadTalk had grown exponentially to a Food & Beverage (F&B) juggernaut with operations in bakeries, restaurants and even food atriums!

All over the globe – from China all the way to the Middle East (Infograph), BreadTalk (FY2013) had a total of:

  • 737 Bakeries
  • 58 Food Atriums
  • 41 Restaurants

From 23 stores to 836 stores in just 10 years ain’t an easy feat! That’s an average of 81 stores opened per year, a CAGR of 43%! Revenues have correspondingly increased with FY2013 Rev at S$537mil and Net profits of S$14mil, more than a 10x increase in both measures!

BreadTalk’s Chairman George Quek aimed to double their FY2013 revenue to S$1bil by 2016! Going forward, Mainland China was projected to generate more than 50% of revenue in the coming years. BreadTalk also isn’t one to rest on their laurels and will continue to explore new markets such as India, Australia to even the United States.

Referencing The Asia Report’s recent article “Do We Have Great Companies In Singapore?“, in my opinion BreadTalk is also a local name that has come a long way!


din tai fung

Brands Under The BreadTalk Group

  1. BreadTalk
  2. Food Republic
  3. Toast Box
  4. RamenPlay
  5. Din Tai Fung
  6. The Icing Room
  7. Carl’s Jr (China)
  8. Bread Society
  9. Thye Moh Chan


toast box

Have You Ever Noticed That BreadTalk Brands Tend To Open Near Each Other

The next time you walk along any shopping malls, for example CapitaMalls Asia Ltd (SGX:JS8) malls, take a moment and you may notice that BreadTalk tends to open close to Toast Box. This is Peter Lynch’s mantra of “investing in what you know” put into practice, mentioned in our previous article “Invest In What You Know!


So Why Would You Find That These Stores Tend Be Close To One Another?

There are various benefits and one practical rationale would be that with such a sizable rental size, they might be able to enjoy more benefits when it comes to rental commitments. The saying “the bigger the better” also applies to lessees (Tenant). If you rent a bigger space,  you would normally have more “say” relative to someone with just a standalone F&B outlet.

Rental expenses is crucial to a F&B business as after employee benefits (wages), rental expenses (operating leases) tend to come in 2nd!

For FY2013, BreadTalk’s operating lease expense of S$115mil made up 21% of revenue!


Value Invest Asia

BreadTalk is most definitely not a regular run-of-the-mill bakery. It has most definitely come a long way since 2000!

But the question that we investors face would be the direction of the business going forward as well as if the price is right?

As at Aug 1, 2014 Breadtalk was trading at a TTM (Trailing 12 months) P/E of 28x!


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All views and opinions articulated in the article were expressed in Mun Hong’s personal capacity and do not in any way represent those of his employer and other related entities. Mun Hong does not own any shares in the companies mentioned above.

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