KUALA LUMPUR: Public Investment Bank Bhd (PublicInvest) has a fair vaue of 70 sen a share for cafe chain Oriental Kopi Holdings Bhd (OKH) , a 59 per cent premium to its initial public offering (IPO) price of 44 sen.
OKH is due to be listed on the ACE Market on Jan 23, 2025.
"We derive a fair value of 70 sen, pegging to a 17 times price-to-earnings (PE) multiple, in-line with average PE ratio of its closest food and beverage (F&B) related peers based on its calendar year 2026 (CY26) earnings per share (EPS) of 4.1sen," it added.
PublicInvest said the valuation is backed by the earnings growth from the opening of new cafes and launching of new products for in-store, as well as distribution and retail of packaged food.
OKH operates a cafe chain under the Oriental Kopi brand, offering non-alcoholic F&B services.
In addition, the group is involved in the distribution and retail of its branded packaged foods.
As at Dec 9, 2024, the group has established 12 cafes in Klang Valley, six in Johor, one in Penang and one in Singapore, located in shopping malls, shop lots and airport retail mall.
OKH also operates a specialty retail store in St. Giles Southkey Hotel, Johor, with a gross floor area of about 620 sqft, which opened in April 2024.
The specialty retail store offers a full range of packaged foods and ready-to-eat items such as 'Oriental egg tart', which is one of its signature products.
PublicInvest forecasts that OKH will achieve a two-year net profit compound annual growth rate (CAGR) of 36 percent, reaching RM79.7 million by the financial year 2026 (FY26).
According to PublicInvest, this projection is driven by opening of new cafes between 2025 and 2026 across the Klang Valley, Negeri Sembilan, Penang, Johor, Malacca, Pahang, Sabah, and Sarawak, focusing on urban and suburban areas with high population density.
"OKH also targets to expand its cafe chain to neighbouring countries through three potential business models, including joint venture owner-operator, master franchisee and franchisee."Additionally, the group will establish a new 3-storey operational facility which includes a new head office, central kitchen and warehouse," the firm noted.
PublicInvest said OKH plans to introduce a new range of Oriental packaged foods, such as teas, coffee, and cookies, with the goal of expanding its market presence.
The company aims to leverage reseller retail networks to tap into underserved markets, including small towns and rural areas.
Additionally, PublicInvest said that four new specialty retail stores showcasing these products are expected to open in the central region and Johor between the financial years 2025 and 2026 (FY25-FY26).
