KUALA LUMPUR (Jan 23): Oriental Kopi Holdings Bhd (KL:KOPI) surged more than 70% during its trading debut on Thursday, following strong demand for the café chain operator’s initial public offering (IPO).
Shares of the Selangor-based company opened at 75 sen versus its IPO price of 44 sen per share. The stock climbed to as high as 87 sen, above all but one analyst’s target price, before easing. The stock was trading at 86 sen at 11.20am after more than 492 million shares changed hands.
At the last price, Oriental Kopi has a market capitalisation of over RM1.7 billion.
Thursday’s rally follows robust investor interest in Oriental Kopi’s IPO that raised RM183.96 million, with demand from individual retail investors overwhelming the amount of shares available by about 60 times. At the IPO price, the company was valued at a price-to-earnings ratio of 20 times based on profit after tax of RM43.13 million for the financial year ended Dec 31, 2024 (FY2024).
“The funds raised from the IPO exercise will provide us with the much-needed resources to significantly increase our operational efficiency, bringing our headquarters, central kitchen and warehouse all under one roof,” Oriental Kopi managing director Datuk Calvin Chan Jian Chern said during the listing ceremony.
Of the proceeds raised, RM75.78 million has been earmarked for working capital, with RM53.68 million going to the establishment of a new head office, central kitchen and warehouse. Meanwhile, RM36.4 million has been allocated to support the expansion of the company's café network within Malaysia.
“This strategic move will streamline our operations and pave the way for even greater growth,” Calvin added.
The remaining funds has been designated for marketing activities in foreign markets, expanding the company’s packaged food segment and covering listing expenses.
Established in December 2020, Oriental Kopi currently operates 20 cafés across Malaysia and one in Singapore. The company also offers in-store packaged coffee and tea, as well as other food items such as spreads, pastries, instant noodles and seasonal specialties like mooncakes.
“Looking ahead, we are well-positioned to capture the growth potential presented by economic expansion, rising household spending, and increasing tourism," Chan said.
"Our dedication to serving authentic, high-quality Malaysian cuisine, coupled with targeted strategic initiatives, will drive sustainable long-term value for our shareholders while reinforcing Oriental Kopi’s position in the Malaysia food and beverages industry,” he added.
Alliance Islamic Bank served as the IPO’s principal adviser, sponsor, sole underwriter and placement agent.