Oriental Kopi Earnings Stable, Expansion on Track but Valuations Seen as Fair

Oriental Kopi Holdings Bhd is expected to deliver stable earnings for 3QFY25, with core profit projected at RM15–16 million (flat to +9% QoQ). This would bring FY25F earnings to RM59–60 million, in line with earlier expectations. Revenue growth from new outlet openings is supporting results, though margins are temporarily diluted by ramp-up costs and the absence of festive seasonality.

Management’s expansion plan remains on track, with 12 additional outlets targeted by FY26. Several key outlets originally planned for 4QFY25 — including Aeon Melaka and Sunway Putra Mall — have already opened ahead of schedule, strengthening earnings visibility. Recent launches at Alamanda Shopping Centre, Senai Airport, and Singapore’s NEX outlet further enhance growth momentum.

Innovation continues to drive brand loyalty. KOPI is diversifying its menu and packaged food range, introducing seasonal products such as Taro Polo Buns and Mid-Autumn Mooncakes. These initiatives, combined with rising café footfall, are expected to boost sales across both café and FMCG segments.

Oriental Kopi Earnings

Despite higher SST and the upcoming rationalisation of RON95 fuel subsidies, analysts believe consumer spending at KOPI will remain resilient. The brand’s middle-to-high-income customer base is less sensitive to moderate cost increases, while Malaysia’s steady GDP growth of +4.4% YoY in 2QFY25 underpins consumption trends.

Forecasts have been revised upwards, with FY25F–FY27F earnings projected at RM59.2m, RM90.5m, and RM96.5m, representing +9% to +12% upgrades from previous estimates. The revisions reflect stronger 1H25 results, rapid outlet expansion, and higher FMCG contribution.

Analysts maintain a HOLD call with a higher target price of RM0.91, pegged to a 20x PE on FY26F EPS of 4.5 sen. While earnings visibility has improved, valuations are considered fair relative to peers, balancing upside with risks such as quality control, labour shortages, and supply chain disruptions.

Source: Apex

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