MBSB Investment Bank Bhd (MBSB Research) and Hong Leong Investment Bank Bhd (HLIB) maintained their BUY calls on Oriental Kopi Holdings Bhd. MBSB Research raised its target price to RM1.15 from RM1.06 while HLIB retained its RM1.28 target, after the group announced expansion plans in Indonesia and Mauritius.
MBSB Research said the proposed Indonesia joint venture and Mauritius franchise strengthen Oriental Kopi’s regional growth narrative, although neither is expected to materially contribute to FY26 earnings. It raised its valuation multiple to 32.5 times from 30 times, saying the higher multiple reflects greater overseas growth optionality.
Oriental Kopi’s subsidiary Oriental Coffee International will hold a 40% stake in a joint venture with Indonesia’s PT Era Boga Nusantara, with Jakarta the priority market. The venture requires an initial investment of about RM1.96 million from Oriental Kopi, with operations expected to begin within one year.
HLIB said the Indonesia JV allows Oriental Kopi to tap a larger market while leveraging its local partner’s network, while the Mauritius deal provides a more asset-light route to recurring franchise fees and royalties.
Under the Mauritius agreement, Coffee Time Ltd will develop and operate Oriental Kopi restaurants exclusively across the country, with the first outlet required to open within 300 days.
Both banks expect the earnings impact to remain negligible until the outlets open and scale, potentially towards late FY27 or FY28. HLIB said the next catalysts would be store-opening confirmations and clarity on the Indonesia JV’s fee and royalty arrangements.
As of 10.34 am, the stock price gained 2.51% to RM1.02.
