KUALA LUMPUR (Sept 2): Butterfield FB Bhd’s IPO applications close on Wednesday amid cautious optimism among analysts on the stock, thanks to the beverage blend manufacturer's competitive position in the industry, meaningful capacity expansion and its venture into diversified markets.
“The IPO entails a public issue of 150.0 [million] new ordinary shares and an offer for sale of 72.0 [million] existing shares,” TA Securities said in a note.
“Collectively, the share offering represents 27.8 % of the group’s enlarged issued share capital,” they added.
The research house said that the group commanded an 11.8% market share in Malaysia’s coffee and tea extract powder blend manufacturing and sales industry, underpinned by its established industry expertise and formulation capabilities.
In a separate note, Public Investment Research said that Butterfield has established relationships and strong quality credentials, with its top five customers having an average relationship of approximately 13 years.
Meanwhile, Butterfield plans to expand its Bukit Minyak premises to support growing customer demand by adding production and storage capacity.
It expects to add 29,170 square feet of production space and 9,954 square feet of storage space, increasing total annual production capacity to 12,597 metric tonnes (MT).
“The expansion is supported by RM15.2 [million] of IPO proceeds earmarked for the Bukit Minyak premises, comprising RM12.5 [million] for construction and RM2.7 [million] for machinery and equipment, with the enlarged facility able to accommodate the fourth manufacturing line,” Malacca Securities said in another note.
Further, Butterfield is positioning itself to capitalise on the growing popularity of matcha-based beverages, commencing operations of its third manufacturing line dedicated to matcha powder blends in February 2026, with an annual capacity of 312 MT.
Overall, analysts remain bullish on the stock, with the average fair value assigned to the group by the three brokers being 58 sen, 10 sen above the IPO price of 48 sen.
Public Investment Research outlines key risks for Butterfield as changes in consumer preferences, price volatility and supply disruption, among others.