PETALING JAYA: Oriental Kopi Holdings Bhd
’s results fell short of market projections after the cafe chain operator delivered softer-than-expected sales in the first half of its financial year ending Sept 30, 2025 (1H25).
In a note, Hong Leong Investment Bank Research (HLIB Research) said Oriental Kopi’s first-half core net profit stood at only 44% of its full-year forecast, and 46% of consensus estimates.
Nonetheless, the research house said Oriental Kopi’s results for the second quarter of FY25 (2Q25) still reflect “commendable” year-on-year (y-o-y) growth of 49% in revenue and 36% in net profit when compared with its pre-initial public offering quarterly run rate.
“The group’s performance was supported by festive driven foot traffic, new outlet contributions, and continued strength from its café chain operations, which made up 93% of revenue.
“While long term-prospects, based on a strong brand presence, expanding outlet network, and rising consumer demand, remain supported by strategic initiatives such as new central facility, product diversification, and overseas expansion, the stock’s current valuation appears to fairly reflect these drivers,” HLIB Research said.
Key initiatives, including the development of a new head office, central kitchen, and warehouse, as well as expansion into domestic and overseas markets, are promising but will take time to fully materialise.
The new facilities in Selangor, targeted for completion by 4Q26, are expected to enhance operational efficiency and support product innovation. the research house added.
HLIB Research also highlighted that the group is diversifying its product offerings, with upcoming launches of new menu items and packaged goods, aimed at expanding its customer base and deepening engagement.
The research house maintained its “hold” call on Oriental Kopi with a target price (TP) of 76 sen per share, based on a 20 times FY26 price-earnings ratio.
Earlier this week, Oriental Kopi said it would continue to focus on expanding its café outlets across various states, including Melaka and Penang.
“The group is also exploring opportunities to introduce innovative menu offerings and expand its range of packaged foods varieties, set to be launched in the coming quarters to attract new customers while retaining our loyal customer base,” it said.
The group is also pursuing initiatives to engage overseas distributors for its brand of packaged foods.
Meanwhile, UOB Kay Hian Research (UOBKH Research) and MIDF Research were more upbeat on the group’s earnings and prospects, with both research houses calling a “buy” on Oriental Kopi with a TP of 88 sen and 83 sen, respectively.
UOBKH Research said Oriental Kopi’s 2Q25 results was a “decent showing”, as the fasting month fell within the quarter.
“The group offers a compelling investment opportunity, given its robust expansion plans and exciting earnings growth trajectory at a three-year earnings compound annual growth rate of 33.1%,” it said.
MIDF Research upgraded its call on the company to a “buy” from “neutral” previously, though its TP was unchanged.
The research house remains positive on Oriental Kopi’s growth prospects, driven by its aggressive expansion and increasing contribution from the high-margin fast-moving consumer goods segment.
