KUALA LUMPUR: Shares in Oriental Kopi took off on its first day of trading on Bursa Malaysia, soaring to a 90.91% premium over its initial public offering (IPO) price on heavy buying interest.
The cafe chain operator, which listed its shares on the ACE Market for 44 sen each, saw investors buying up its stock to an intramorning high of 84 sen apiece.
The counter was the most actively traded on Bursa Malaysia by a wide margin, with 378.59 million shares crossing within the first 40 minutes of trading.
Analysts have been positive over Oriental Kopi's listing, with Hong Leong Investment Bank (HLIB) Research initiating coverage of the stock with a "buy" call and target price of 81 sen a share.
HLIB's target price is based on 20x FY26 price-earnings ratio (PE).
It noted that while there is no peer comparison on the market, OldTown Bhd, which was taken private in 2017, was valued at 23.6x FY17 price-earnings ratio.
"At just four years old with 20 outlets, the company remains in its early stage, offering significant growth potential," it said in its report.
HLIB highlighted that Oriental Kopi aims to focus its expansion by prioritising only high foot-traffic locations.
The chain is also planning to open about 50 outlets in Malaysia, which differentiates it from its peers that operate hundreds of outlets.
Oriental Kopi plans to add 10 cafes in Malaysia in FY25 and three more in FY26. In Singapore, it plans to open two additional cafes by 2025.
Meanwhile, MIDF Research has started coverage on Oriental Kopi with a "buy" call and target price of 83 sen.
"This valuation premium is justified by the company’s robust growth trajectory, aggressive expansion plans, and strong profitability," it said.
