Oldtown White Coffee
Maybank IB Research
PP16832/01/2012 (029059)
Initial Public Offering
29 June 2011
OldTown Berhad
Not Rated
IPO price: Fair value: RM1.25 RM1.50
Another good thing since sliced bread
Malaysian‟s kopitiam. OldTown is Malaysia’s home grown kopitiam operator with the largest branch network in Malaysia; it also distributes packaged coffee products across the region. Valuing the stock in line with its consumer peers at a prospective 2012 PER of 11.2x, our fair value is RM1.50, or a 20% upside to its listing price of RM1.25. OldTown offers a gross dividend yield of 4.7% at its listing price. Over a decade of history. The group commenced operations with 3in-1 instant coffee manufacturing in 1999 under the “OLDTOWN” brand name and started exporting a year later. OldTown built its second core business in 2005 when the first OldTown White Coffee outlet was opened to public in Ipoh. The vertical expansion into the food services industry has been successful and today OldTown has a total of 182 outlets in Malaysia, Singapore and Indonesia, while its coffee products are exported to 12 different countries. Booming on a bulging midriff. We like OldTown for its stable food and beverage business with visible growth prospects. While consumers’ preferences are constantly changing, we believe the variety of food in OldTown truly caters to everyone’s taste buds making it a preferred hang out spot. The rising purchasing power of the younger population is positive for OldTown because they tend to hang out more often. Management targets to open another 27 (11 already) outlets by end 2011; 22 in Malaysia, 3 in Singapore and 2 more in Indonesia.
Chong Ooi Ming ming.c@maybank-ib.com (603) 2297 8676 Kang Chun Ee chunee@maybank-ib.com (603) 2297 8675
Description: “Kopitiam” operator and pre-mix coffee distributer & manufacturer. Information: Ticker: New Shares Issued (m): Total Issued Shares – post listing (m): Market Cap (RM m): Major Shareholders: Old Town International
PP16832/01/2012 (029059)
Initial Public Offering
29 June 2011
OldTown Berhad
Not Rated
IPO price: Fair value: RM1.25 RM1.50
Another good thing since sliced bread
Malaysian‟s kopitiam. OldTown is Malaysia’s home grown kopitiam operator with the largest branch network in Malaysia; it also distributes packaged coffee products across the region. Valuing the stock in line with its consumer peers at a prospective 2012 PER of 11.2x, our fair value is RM1.50, or a 20% upside to its listing price of RM1.25. OldTown offers a gross dividend yield of 4.7% at its listing price. Over a decade of history. The group commenced operations with 3in-1 instant coffee manufacturing in 1999 under the “OLDTOWN” brand name and started exporting a year later. OldTown built its second core business in 2005 when the first OldTown White Coffee outlet was opened to public in Ipoh. The vertical expansion into the food services industry has been successful and today OldTown has a total of 182 outlets in Malaysia, Singapore and Indonesia, while its coffee products are exported to 12 different countries. Booming on a bulging midriff. We like OldTown for its stable food and beverage business with visible growth prospects. While consumers’ preferences are constantly changing, we believe the variety of food in OldTown truly caters to everyone’s taste buds making it a preferred hang out spot. The rising purchasing power of the younger population is positive for OldTown because they tend to hang out more often. Management targets to open another 27 (11 already) outlets by end 2011; 22 in Malaysia, 3 in Singapore and 2 more in Indonesia.
Chong Ooi Ming ming.c@maybank-ib.com (603) 2297 8676 Kang Chun Ee chunee@maybank-ib.com (603) 2297 8675
Description: “Kopitiam” operator and pre-mix coffee distributer & manufacturer. Information: Ticker: New Shares Issued (m): Total Issued Shares – post listing (m): Market Cap (RM m): Major Shareholders: Old Town International