KUALA LUMPUR (Nov 29): Hextar Industries Bhd (KL:HEXIND) said on Friday it has signed an agreement to bring in Chinese coffee house chain Luckin Coffee to Malaysian shores.
The company will have the exclusive rights to develop, open, and operate coffee shops under the Luckin Coffee brand nationwide in Malaysia, Hextar said in an exchange filing. The rights would be for 10 years, with possible renewal for two successive five-year terms.
The company plans to expand Luckin Coffee aggressively across the country, Datuk Eddie Ong Choo Meng, a major shareholder of Hextar Industries, said in a statement. "We have equally ambitious plans for Luckin Coffee in Malaysia, inspired by the brand's tremendous growth,” he said.
The master development and operating agreement signed by Hextar unit Global Aroma Sdn Bhd with Luckin Coffee Holding Singapore Pte Ltd follows a report by The Edge in June that Luckin Coffee plans to partner a Bursa Malaysia-listed firm for its debut in the country.
Founded in 2017 and headquartered in Xiamen, Luckin Coffee operated 21,343 stores globally as of the third quarter of 2024. In the third quarter alone, the company opened 1,382 new stores.
Luckin Coffee opened its first overseas locations in Singapore on March 31, 2023. By the end of that year, 30 outlets had been opened in the country.
For its foray into Malaysia, the plan is to open the first store by the first quarter of 2025.
The entry of Luckin Coffee comes at a time of heightened competition from a rising number of coffee brands and outlets competing to fill in the gap left by Starbucks, as the American franchise faces protracted consumer boycotts due to Middle East tensions.
"We believe that bringing this success story to Malaysia will not only widen our portfolio, but also tap into the thriving food and beverage market here, making it a highly worthwhile investment for both Luckin Coffee and Malaysian consumers," said Ong.
Hextar Industries is mainly involved in manufacturing, formulation, distribution and trading of fertilisers, as well as the supply and distribution of quarry products and machinery.
The board will have to seek shareholders' approval for the business diversification — if it anticipates that the revenue derived from the new venture may contribute 25% or more of its net profit, or potentially divert 25% or more of its net assets.
At Friday's noon market break, shares of Hextar Industries were up one sen or 2.08% at 49 sen, with a market capitalisation of RM1.35 billion ahead of the announcement.