ORIENTAL Kopi Holdings Bhd, owner of 19 outlets across Malaysia and one joint-venture outlet in Singapore, saw a sizzling debut for its initial public offering (IPO).
Priced at 44 sen per share, Johor-based café chain operator saw its share open at 79.1 sen or close to 80% higher, with 3.9 million shares exchanging hands, as soon as it hit the market today.
As at 10.30am today, close to 466.2 million shares had already exchanged hands, with the stock hitting an intra-day high of 85.6 sen.
The counter has 6 ‘Buy’ calls amongs analysts tracked by Bloomberg with a consensus TP of 76 sen.
In an initiation report released today, MIDF Research shares a 52-week target price of 83 sen, based on 20-time price over earnings (PE) for the forecasted earnings in 2026, representing a 20.5% premium to its domestic peers.
“This valuation premium is justified by the company’s robust growth trajectory, aggressive expansion plans, and strong profitability,” it said.
Since its inception in 2020, Oriental Kopi has leveraged its owner-operated business model to ensure consistent quality and build strong customer loyalty.
In another report, Hong Leong Investment Bank, also with a ‘Buy’ and a TP of 81 sen, noted that Oriental Kopi has committed to a 30% dividend payout policy, supported by its robust free cash flow generation and a healthy net cash position.
“Furthermore, with only four years of operations and a modest network of 20 outlets, OrientalK is still in its early stage, presenting substantial opportunities for growth. While there is no similar peer comparison, we note that OldTown, which was taken private in 2017 was valued at 23.6x FY17 PE,” it said.
Its major shareholders are its MD Datuk Chan Jian Chern (42.2%), Chan Yen Min (15.6%) and Koay Song Leng (10.9%).
It is primarily involved in cafe chain operations as well as the distribution and retail of its brands of packaged foods. The cafe chain operates under the Oriental Kopi brand providing food and beverage services and in-store sales of its brands of packaged foods.
During its IPO balloting held on Jan 14, its shares were oversubscribed by about 60 times. — TMR
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