PETALING JAYA: Analysts remain constructive on Oriental Kopi Holdings Bhd
’s long-term growth prospects, supported by resilient domestic consumption, rising tourist arrivals ahead of Visit Malaysia 2026 and ongoing brand-building initiatives.
This was despite the group’s third quarter of financial year 2026 (3Q26) core net profit of RM17mil, which came in below expectations due to weaker margin flow-through and a higher effective tax rate during the quarter.
Apex Research, in a note to clients, said Oriental Kopi’s management does not intend to accelerate or slow the current pace of store expansion, with new openings guided by the availability of suitable locations.
The group still targets around eight new domestic outlets in 2026, implying roughly two more openings in 4Q26, it added.
Management also indicated that gross profit margin is expected to hold up going forward, aided by recent price increases of RM1 to RM2 on selected menu items.
Overseas, Oriental Kopi’s Indonesia joint venture remains on track to open its first Jakarta outlet by end-2026, with two to three further outlets planned for financial year 2027 (FY27), while the Mauritius franchise remains in the early stages of preparation ahead of its contractual deadline of around June 2027.
Apex Research cut Oriental Kopi’s FY26 core net profit forecast by 6.4% to RM66mil from RM70.5mil, as gross profit margin softened to 22.7% for the nine months of FY26 (9M26), from 25.5% in 9M25, due to continued outlet expansion costs.
“We expect this pressure to persist into 4Q26, viewing it as tied to this year’s elevated pace of new store openings rather than a structural shift,” the research house said.
It maintained a “hold” recommendation on the stock with an unchanged target price (TP) of RM1.04 per share.
In a report, Hong Leong Investment Bank (HLIB) Research revised Oriental Kopi’s FY26 and FY27 core earnings forecasts downward by 17% and 8%, respectively, to reflect higher operating costs incurred from its aggressive outlet expansion.
It expects the group’s medium-term prospects to be supported by its resilient brand equity among domestic consumers and an outlet expansion strategy that continues to track well.
The group also has a healthy net cash position of RM240mil, which should allow for a comfortable asset-funded rollout without recourse to gearing, said HLIB Research. It reiterated a “buy” call on the stock but lowered its TP to RM1.17.
RHB Research, meanwhile, expects sales growth to remain healthy, albeit with a more gradual ramp-up from the enlarged outlet base as newer stores may take time to reach optimal productivity.
More importantly, the sequential recovery in both cafe and fast-moving consumer goods (FMCG) margins, together with broadly stable operating expenditure, supports RHB Research’s view that operating leverage is beginning to kick in.
Post-results, the research house cut Oriental Kopi’s FY26, FY27 and FY28 earnings by 6%, 5% and 3%, respectively, mainly after lowering its revenue assumptions by around 1% across the forecast period.
It also kept a “buy” call on the stock with a lower TP of RM1.28.
Phillip Capital Research said Oriental Kopi is expected to be driven by key catalysts including government collaborations for Visit Malaysia 2026, strong brand equity and promotional initiatives, higher-margin FMCG offerings, and ongoing overseas expansion to broaden its market reach.
It also expects stronger sequential earnings, driven by new store openings and improving operating leverage.
Phillip Capital Research maintained a “buy” call on the stock with a TP of RM1.26.
