KOPI’s 3QFY25 CNP came in at RM17.0m (+16.0% QoQ), bringing 9MFY25 CNP to RM45.2m, accounting for 76% of our full-year forecast and 74% of consensus estimates. We deem the result ahead of expectations, as the quarter defied our earlier assumption that the absence of festive seasonality would dampen earnings.
The stronger QoQ results are attributed to resilient café footfall (GP +17.1% QoQ) and increased packaged food sales (GP +29.6% QoQ).
Earnings momentum is expected to continue into 4QFY25, supported by menu and packaged food innovation, branding initiatives, and ongoing outlet expansion.
We lift our FY25F earnings by 3.7% to reflect stronger-than-expected 3QFY25 performance, with 4QFY25 expected to deliver similar performance trajectory. That said, we trim FY26–27F earnings by 7.7%/0.1% to account for a normalisation in sales growth and higher upfront operating costs associated with new store openings.
We upgrade our recommendation to BUY from HOLD, raising our target price to RM1.26/share, based on 30x P/E multiple applied to FY26F EPS of 4.2 sen, alongside a three-star ESG rating.
Results exceeded expectations. Excluding one-off listing expenses (+RM0.1m) and a fair value gain from other investments (-RM1m), KOPI reported a 3QFY25 CNP of RM17.0m (+16.0% QoQ), bringing the 9MFY25 total to RM45.2m, accounting for 76% of our full-year forecast and 74% of consensus estimates. We deem the result ahead of expectations, as the quarter benefited from resilient café footfall and stronger packaged food sales, defying our earlier assumption that the absence of festive seasonality would dampen earnings. We expect 4QFY25 to sustain a similar performance trajectory.
QoQ. 3QFY25 CNP rose 16% QoQ, driven by stronger contribution from both café segment (GP +17.1% QoQ) and packaged food segment (GP +29.6% QoQ). The café division experienced a revenue growth of 11.8%, supported by higher footfall despite the absence of festive seasonality, complemented by contributions from newly opened outlets and the ramp-up of the 7 stores launched in the first three quarters of FY25. Meanwhile, packaged food division’s sales grew 28.2%, benefited from the rollout of nine merchandise kiosks, an initiative introduced in CY25. Steady mall traffic during the school holiday period further supported higher patronage, enabling KOPI to sustain growth even in a non-festive quarter.
YoY. Since KOPI was only listed in January 2025, no YoY comparison is available.
Outlook. KOPI’s earnings momentum is expected to continue into 4QFY25, supported by new menu launches, product innovation, targeted marketing, and café expansion (10 outlets opened in FY25, six more planned by FY26). Looking ahead, the Group’s new operational facility — head office, central kitchen, and warehouse — due by CY26 could optimise food preparation while enhancing R&D. While upfront store-opening costs may pressure margins, these should ease as outlets mature, keeping the outlook positive for the year-end crowd.
Earnings Revision. We lift our FY25F earnings by 3.7% to reflect stronger-than-expected 3QFY25 performance, with 4QFY25 expected to deliver similar performance trajectory. That said, we trim FY26–27F earnings by 7.7%/0.1% to account for a normalisation in sales growth and higher upfront operating costs associated with new store openings.
Valuation. Following earnings revision, we upgrade our recommendation to BUY from HOLD, raising our target price to RM1.26/share, based on 30x P/E multiple applied to FY26F EPS of 4.2 sen, alongside a three-star ESG rating. The assigned P/E multiple, revised higher from 20x previously, is justified by KOPI’s robust earnings growth outlook, with the core earnings expected to deliver a FY24–27F CAGR of c.31%. On a PEG basis, this implies a ratio of c.1.0x, which is reasonable relative to its strong growth profile and in line with valuations accorded to high-growth consumer peers. The 30x also implies only a c.4% premium to the weighted average forward P/E multiple of listed peers in Consumer sector (28.8x), which we believe is justified by KOPI’s scarcity value as a growth-focused F&B retail stock and its superior growth trajectory versus peers.
Risks. Quality control, shortage of labour, and supply chain disruptions.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.209019 | 4.241387 |
| EUR | 4.930101 | 4.933938 |
| CNY | 0.592333 | 0.592792 |
| HKD | 0.540178 | 0.543866 |
| SGD | 3.276713 | 3.298990 |