Oriental Kopi Holdings Bhd - Below Expectations
Wed, 25-Feb-2026 07:55 am
by Daryl Hon • Apex Research

Counter

KOPI (0338)

Target Price (RM)

1.20

Recommendation

Hold

  • KOPI’s 1QFY26 CNP of RM15.7m (+5.9% QoQ, +16.2% YoY) came in below expectations at 19% of our full-year and consensus estimates, impacted by margin pressure from expansion-related costs.

  • The Group’s proposed 5,262 sqm integrated facility, targeted for completion by CY26, is expected to support FMCG expansion and help ease margin pressure.

  • We trim our FY26F/FY27F earnings forecasts by 4% and 9% respectively on lower margin assumptions, while introducing our FY28F earnings forecasts.

  • Post-earnings revision, we maintain our HOLD call with a lower TP of RM1.20 (from RM1.26), based on unchanged 30x FY26F EPS of 4.0 sen, alongside its three-star ESG rating.

     

Results below expectations. Excluding a fair value gain from other investments (-RM1.4m), KOPI reported a 1QFY26 CNP of RM15.7m (+5.9% QoQ, +16.2% YoY). The results came in below expectations, accounting for 19% of our full-year forecast and consensus estimates. The shortfall was due to margin pressure from expansion-related costs weighed on profitability.

 

QoQ. CNP rose 5.9% QoQ in line with the 4.5% revenue growth, driven by stronger year-end festive footfall across its café chain operations. However, PBT declined 8.5% QoQ as selling & distribution expenses rose 34.2%, mainly due to outlet opening costs tied to its expansion plans.

 

YoY. CNP rose 16.2% YoY, in line with the 42.3% revenue growth driven by the success of its outlet expansion in accommodating higher customer traffic. However, overall gross profit margin declined 1.9ppts due to higher operating costs, including foreign worker permit expenses incurred for new outlet openings.

 

Outlook. KOPI’s café chain operations remain its core earnings pillar, further supported by its recent proposal to acquire a 5,262 sqm land to develop an integrated operational facility comprising a central kitchen, warehouse and office, expected to be completed by CY26, which could help ease margin pressure while supporting FMCG SKU expansion. Meanwhile, its ongoing partnership with Tourism Malaysia under the “Truly Malaysian Taste” campaign should enhance brand visibility and positioning, allowing KOPI to better capitalise on tourist inflows under Visit Malaysia 2026, although earnings impact is likely gradual as near-term performance remains weighed by expansion-related costs.

 

Earnings Revision. We trim our FY26F/FY27F earnings forecasts by 4% and 9% respectively on lower margin assumptions, while introducing our FY28F earnings forecasts.

 

Valuation & Recommendation. Post-earnings revision, we maintain our HOLD call with a lower TP of RM1.20 (from RM1.26), based on unchanged 30x FY26F EPS of 4.0 sen, alongside its three-star ESG rating.

 

Risks. Quality control, shortage of labour and supply chain disruptions.

Read more details in:

Disclaimer

The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.

Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.

Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 3.879490 3.910828
EUR 4.586505 4.596176
CNY 0.565924 0.567111
HKD 0.495908 0.499928
SGD 3.062969 3.087829