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[公司专区] 5201 Oldtown 舊街場

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x 1077
发表于 2011-6-28 18:46 | 显示全部楼层
食物专门店的模式已经开始在马来西亚萌生,也是美食世界的一个噩梦,越来越多食物变为专门店,先来的就有 kopitiam,过后有板面,再来什么鱼头米粉,福建面,都变成了专门店的方式。

食物水准维持不到,但是环境变好了,年轻的一辈就偏爱这些地方,而这个趋势将导致以往 food court 或小档口无法生存,从商业的角度来看,基于专门店是年轻人的世界,所以商机无限,但从食家的角度观看,这是一个悲哀。

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x 882
发表于 2011-6-29 12:42 | 显示全部楼层
公开售股集资7900万 旧街场建设新工厂
二零一一年六月二十八日 下午五时五十三分

(吉隆坡28日讯)预计在2011年7月13日在大马交易所主板上市的旧街场集团(OldTown),透过首次公开售股(IPO)集资7900万令吉,将投资5200万令吉建设新生产线及食品加工厂。

旧街场集团主席拿督阿末达西在招股书推介仪式上表示:“我们计划投资4000万令吉建设新工厂,另外1200万令吉购买机械设备。这项投资将透过首次公开售股、内部融资或向银行贷款融资。”该集团预计坐落怡保的新工厂将在2013年完工,届时将提高生产量高达500%。

在首次公开售股活动中,该公司将发出6340万新股,另外献售3300万股票,每股发售价为1.25令吉。在这批新股当中,其中4840万股作为私下配售,1000万股供公众认购,以及500万股则供该集团合格董事、雇员及商业伙伴申请。

该集团表示,上市集资7900万令吉,其中3810万令吉充作资本开销,包括新工厂建设的融资、购买机械和新设备以及开设更多分店,1970万令吉用作收购还不属于该集团旗下的公司,1050万令吉充当营运资本,另外590万令吉偿还贷款,以及500万令吉支付上市开销。

旧街场集团将在今年开设38家咖啡馆,其中31家在大马、3家在新加坡及4家在印尼,展望在未来三年能达到300家。截至今年5月18日,该集团已经开设14家咖啡馆。

旧街场集团董事经理在记者会上透露,该集团目前的营业额,其中20%来自海外业务,包括餐饮业(F&B)以及快速消费品(FMCG),贡献5000万令吉。他表示:“我们会积极拓展海外市场,将快速消费品推进中国、伊朗及纽西兰,将在本月进驻纽西兰市场,中国市场则将集中在华南。”

大马证券投资银行和联昌国际投资银行是旧街场集团上市计划的联合包销商及配售代理,前者也是该集团上市的首席顾问。

http://www.kwongwah.com.my/news/2011/06/28/146.html

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发表于 2011-6-29 13:03 | 显示全部楼层
20pc upside potential to Old Town IPO
From HwangDBS Vickers

JUNE 28 — Highlights


- 2-in-1 exposure in café chain operation and coffee beverage manufacturing

- Strong cash-flow generation equals high dividend payout

- Fair value of RM1.50 based on FY12F P/E of 12 x, offering 20 per cent upside potential

Modern twist to old heritage


Old Town is the manufacturer of “OLDTOWN” instant beverages and the operator of the “OLDTOWN WHITE COFFEE” kopitiam-based café outlet chain. Since the inception of its first shop in 2005, it has expanded to 182 café outlets in Malaysia, Singapore and Indonesia as at June 22, 2011. Of these, half are either fully owned or partially owned outlets. The other half are franchised shops. In terms of profit mix, the café chain operation contributes more (65 per cent of FY10 net profit) while the beverage manufacturing segment accounts for the balance.

The opening of more outlets will drive growth. Within a short six years, Old Town has expanded its “OLDTOWN WHITE COFFEE” café outlets from one store in Ipoh to 182 outlets spanning Malaysia, Singapore and Indonesia. The number of outlets is set to continue growing, with 38 outlets slated to open in FY11 (of which 14 are already in operation) and an additional 31 shops in FY12.

Each fully owned outlet is projected to generate about RM1 million a year in revenue, though the initial contributions will be lower. We expect the growing network of café outlets to lift total revenue to RM300.6 million  (+18 per cent y-o-y) in FY11 and RM349.5 million (+16 per cent y-o-y) in FY12, translating to a two-year net profit CAGR of 14 per cent to RM41.4m.

High-dividend payout expectations

Old Town has set a minimum dividend payout policy of 50 per cent of its gross earnings for FY11 and FY12. Based on our forecasts, net DPS works out to be 4.1 sen this year and 4.7 sen next year, which translates to dividend yields of 3.3 year and 3.8 years respectively. We believe Old Town is in a position to sustain the high dividend payout expectations given its healthy balance sheet, with net cash balance projected to rise from RM14.4 million (or 4.4 sen per share) after the listing to RM34.8 million (or 10.6 sen per share) by end-FY12.

Subscribe for a 20 per cent upside potential. We arrive at our RM1.50 fair value based on a P/E multiple of 12x on FY12F EPS of 12.5 sen. Compared with its two locally listed peers, our target P/E valuation represents a discount to KFC (P/E of 16x) and a premium to Berjaya Food (P/E of 9x). This partly reflects Old Town’s market-cap size of RM495 million (based on our fair value of RM1.50) vis-à-vis KFC’s RM3.1 billion and Berjaya Food’s RM119 million.

* This is the personal opinion of the analyst. The Malaysian Insider does not endorse the view unless specified.
http://www.themalaysianinsider.c ... al-to-old-town-ipo/

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发表于 2011-6-30 19:18 | 显示全部楼层
OldTown: Another good thing since sliced bread               
Tags: Brokers Call | Maybank IB | OldTown Bhd

Written by Financial Daily          
Thursday, 30 June 2011 10:44


OldTown Bhd
IPO price RM1.25
Not rated, fair value of RM1.50: OldTown is a homegrown kopitiam operator with the largest branch network in Malaysia and it distributes packaged coffee products across the region. Valuing the stock in line with its consumer peers at a prospective 2012 price-earnings ratio of 11.2 times, 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.

The group commenced operations with 3-in-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 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.

We like OldTown for its stable food and beverage business with visible growth prospects. While consumer preferences are constantly changing, we believe the variety of food in OldTown caters to everyone’s taste 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, three in Singapore and two more in Indonesia.

Presently, OldTown manufactures 5.4 million tonnes of instant coffee mix and instant milk tea mix per annum at its facilities in Ipoh and Subang Jaya. Part of the IPO proceeds will go towards capacity expansion. With the plan to relocate its coffee and food processing plants in Ipoh to one central location, its logistics will be more efficient to support its extensive network.

We expect outlet expansion from café chain operations to contribute to revenue growth of 20.7% in 2011 and 15.1% in 2012. As for beverage manufacturing, we are looking at revenue growth of 17.5% for 2011 and 17% for 2012, driven primarily by higher utilisation and new capacity. Overall, we project turnover growth of 19.6% and 15.8% for 2011 and 2012, leading to decent net profit growth of 12.6% and 12.5% respectively. — Maybank IB Research, June 29


This article appeared in The Edge Financial Daily, June 30, 2011.

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发表于 2011-7-1 17:11 | 显示全部楼层
OldTown adds choice to F&B stocks      

KUALA LUMPUR: New food and beverage (F&B) outlets are sprouting like mushrooms across new townships and shopping malls as restaurateurs rush to grab a slice of the growth in consumer spending. While there is ample choice for diners, there used to be limited options for investors on Bursa Malaysia looking for exposure to the F&B sector. Not anymore.

For a long time, the benchmark and probably only F&B stock worth looking at was KFC Holdings (M) Bhd. KFC not only served its world-famous secret recipe chicken, but also threw in the occasional colourful boardroom and shareholder tussles in as side dishes.

Over the last 18 months, we have seen two new IPOs for F&B stocks — Oversea Enterprise Bhd and Berjaya Food Bhd.

Soon, they will be joined by OldTown Bhd, a home-grown coffee outfit known for its “OldTown” café outlets and white coffee.

As OldTown heads for listing in mid-July, the question is how the company stacks up against its peers.

At an offer price of RM1.25 per share, it places OldTown’s historical price-to-earnings ratio (PER) at 12.9 times, which appears to be on the high side relative to other recently listed IPOs, although not to industry benchmark KFC Holdings (M) Bhd.

KFC, aside from being a well- known franchise, is cash-rich and currently trades at a historical PER of 19.2 times and a forward PER of 18.3 times. But analysts note it deserves a big premium over the rest for its global brand name.


OldTown Bhd, with its ubiquitous chain of OldTown White Coffee outlets, is heading for a listing on Bursa's Main Market and has already committed to paying out 50% of its gross earnings.
Last year, Oversea Enterprise Bhd listed on the ACE Market with an issue price of 23 sen, which at the time translated into a historical PER of 7.8 times. However, Oversea, which runs a chain of Chinese restaurants, did not manage to capture the imagination of investors and was last trading at 13.5 sen, 9.5 sen below its issue price.  The highest the stock had closed at over the past 12 months was 20 sen. Part of it had to do with its poor financial performance.

The company went into the red in the quarter just after listing, and chalked up a net loss of RM324,000 on a revenue of RM62.74 million in FY Dec 2010. Oversea had slipped into the red following a decline in revenue from both its restaurant and manufacturing business.

In FY09, just before the IPO, the company had reported a net profit of RM5.2 million on the back of RM65.1 million in revenue.

More recently, Berjaya Food Bhd, which owns the chain of Kenny Rogers Roasters restaurants in Malaysia, was listed in March 2011 at an issue price of 51 sen. Based on its earnings per share (EPS) of 6.14 sen for FY April 2010, that implied a historical PER of 8.3 times.

Unlike Oversea, Berjaya Food has fared much better. Its share price was last traded at 88.5 sen, up a hefty 73.5% from its IPO price. And unlike Oversea, it fared better in FY11, with net profit of RM10.6 million — or 7.5 sen per share, 22% higher than FY10’s RM8.7 million. That places the stock at a historical PER of 11.8 times, lower than OldTown’s IPO valuation.  

It would not be fair to do an apple-to-apple comparison of OldTown and Oversea, despite both being local brand names unlike KFC and Kenny Rogers’ more global presence. But there is no denying some of the similarities between the companies.

Oversea, which is known for its chain of Chinese restaurants, also manufactures baked goods for sale. OldTown has its ubiquitous chain of OldTown White Coffee cafés and makes its line of white coffee.

Both are also in the same overseas markets, namely Singapore and Indonesia. However, while OldTown’s business model is that of a franchise, similar to KFC, Oversea still manages its restaurant chain, resulting  in a more limited reach.

Of OldTown’s outlets in Malaysia, at least half are franchised while the remaining outlets are either fully- or partly-owned by the company. Being in a franchised business offers some buffer for the company against the fluctuating fortunes of a restaurant, and gives it a stream of franchise fees.

Also, while Oversea opted to list on the ACE market, OldTown is heading straight for the Main Market, which could possibly explain the more expensive valuation.

Compared to another coffee chain — a global one — Starbucks Corp is trading at a historical PER of 27.2 times and a forward PER of 26.5 times. However, Starbucks has been hit by the economic downturn and over expansion, which has made investors slightly wary of the stock.

OldTown has been working on establishing its brand name, which bodes well for the chain in the long run. According to analysts, its model seems to echo that of KFC, which could mean that the company could eventually end up cash-rich.

OldTown has committed to paying out 50% of its gross earnings.  According to ECM Libra, this translates into an estimated FY11 dividend per share of 5.3 sen, or a 4.2% yield.

Beyond the cafes, the company is also investing some RM52 million into a plant in Ipoh to manufacture instant beverages and coffee powder. The new plant would help to increase the company’s production capacity by 500%, and drive its next stage of growth. It would also offer a more consistent earnings stream in the long run.

OldTown certainly seems to have high aspirations, but with the current state of the market, it still remains to be seen whether investors will see the value in its business.

http://www.theedgemalaysia.com/i ... -to-fab-stocks.html

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 楼主| 发表于 2011-7-1 21:47 | 显示全部楼层
Result

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发表于 2011-7-1 22:16 | 显示全部楼层
Special Announcement
XF-110701-62584
Date Announced
:
01/07/2011

Subject
:
OLDTOWN BERHAD
INITIAL PUBLIC OFFERING OF 96,394,000 ORDINARY SHARES COMPRISING PUBLIC ISSUE OF 63,394,000 NEW ORDINARY SHARES AND OFFER FOR SALE OF 33,000,000 ORDINARY SHARES OF RM1.00 EACH AT AN ISSUE/OFFER PRICE OF RM1.25 PER ORDINARY SHARE PAYABLE IN FULL ON APPLICATION PURSUANT TO ITS LISTING ON THE MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD
Contents
:
MIH is pleased to announce that Oldtown Berhad’s (“OIdtown) Public Issue of which 10,000,000 shares were made available for application by the Malaysian Public has been oversubscribed and balloting of successful applications was conducted this afternoon. In addition, the Placement Agent has also confirmed that 45,144,000 shares reserved for private placement to identified investors have been placed out.

A total of 9,366 applications for 117,642,100 shares were received from the Malaysian Public for a total of 10,000,000 shares available for public subscription, which represents an oversubscription rate of 10.76 times.

All Notices of Allotment for these shares will be mailed to successful applicants on or before July 12, 2011.

FULL TEXT OF THIS ANNOUNCEMENT IS AVAILABLE FROM THE ENCLOSED ATTACHMENT.



© 2011, Bursa Malaysia Berhad. All Rights Reserved.

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发表于 2011-7-2 10:41 | 显示全部楼层
OldTown IPO oversubscribed 10.8 times, plans deeper inroads into China      
  
KUALA LUMPUR: Main Market-bound café chain operator and instant beverage mix manufacturer OldTown Bhd is targeting to make deeper inroads into China by the fourth quarter this year.

Its group managing director Lee Siew Heng in a statement Friday, July 1 said that the company, which exports its products to more than 10 countries, targets to make deeper inroads into China by the fourth quarter this year.

“We see great potential in the Chinese market due to the sheer size of the population and will leverage on our initial inroads to expand the revenue contribution,” he said.

He said the company currently exports its beverage mixes to Singapore, Hong Kong, the United States, Canada, Taiwan, Indonesia, Brunei, Thailand, Philippines, China, United Kingdom, Australia, and, since in the first quarter of 2011, New Zealand

Its export market contributed over 10% to its revenue in financial year ended Dec 31, 2010, and the group anticipates to record double-digit growth in its export revenue contribution by the end of 2011, he said.

Lee also said OldTown’s initial public offering (IPO) had been oversubscribed by 10.8 times, after it received 9,366 applications for 117.64 million shares with a total value of RM147.1 million, for the public tranche of 10 million new shares under its IPO.

OldTown is scheduled to list on the Main Market on July 13.

http://www.theedgemalaysia.com/b ... ads-into-china.html

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发表于 2011-7-2 11:42 | 显示全部楼层

OldTown Bhd, with its ubiquitous chain of OldTown White Coffee outlets, is heading for a listing on Bursa's Main Market and has already committed to paying out 50% of its gross earnings.

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发表于 2011-7-4 12:41 | 显示全部楼层
舊街場超額認購10.76倍

大馬財經  2011-07-02 14:21

(吉隆坡1日訊)放眼7月13日上市馬股主板的舊街場(Old Town)有限公司,供大馬公眾認購的1千萬新股,超額認購10.76倍。

舊街場申請截止,開放予公眾申請的部份,共接獲9千366份申請,涉及1億1千764萬2千100股,相等於10.76倍超額認購。

上述1千萬新股中,500萬股為土著部份,另500萬為公眾部份。此外,另235萬股為供貿工部(MITI)批准的土著投資者申請的股權。

土著部份共接獲2千108份申請,涉足2千318萬6千400股,意味超額認購3.64倍,而公眾部份接獲7千258份申請,涉足9千445萬5千700股,超額認購達17.89倍。
成功申請者將在7月12日前獲書面通知。

配合上市,舊街場將發行6千339萬4千股新股,首次公開售價為1令吉25仙,預料能籌集7千920萬令吉。(星洲日報/財經)

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发表于 2011-7-4 20:38 | 显示全部楼层

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发表于 2011-7-6 12:16 | 显示全部楼层

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发表于 2011-7-6 17:14 | 显示全部楼层
Maybank 还没退? 我急需要钱!!
jackylcs86 发表于 2011-7-6 17:10



    i also use maybank2u apply, till now still donno the result..shit loo

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发表于 2011-7-11 20:46 | 显示全部楼层
Initial Public Offering (IPO)
Reference No MB-110711-53203

Submitting Merchant Bank
:
AMINVESTMENT BANK BERHAD
Company Name
:
OLDTOWN BERHAD
Stock Name
:
OLDTOWN   
Date Announced
:
11/07/2011


Date of listing
:
13/07/2011
   Enlarged issued and paid up share capital in the following
Units
:
330,000,000
Currency
:
MYR 330,000,000.000
Par Value ($$)
:
MYR 1.000
Stock code
:
5201
Stock name
:
OLDTOWN
ISIN code
:
MYL5201OO008
Board
:
Main Market
Sector
:
TRADING/SERVICES
Do you wish to list any child stock / new type of securities in conjunction with the IPO?
:
No


Remarks :


© 2011, Bursa Malaysia Berhad. All Rights Reserved.

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发表于 2011-7-12 17:49 | 显示全部楼层
1。38

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发表于 2011-7-13 09:06 | 显示全部楼层
Nice all people earn 11%++ 1.38~~~

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发表于 2011-7-13 09:21 | 显示全部楼层
if global market is good then should be over 1.45 , but market no stable.
i sell all at 1.38

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发表于 2011-7-13 09:35 | 显示全部楼层
OldTown to open slightly higher     
  
KUALA LUMPUR: Cafe chain operator and coffee beverage manufacturer OldTown Bhd is expected to open slightly higher on Wednesday, July 13 amid the overall cautious market sentiment.

Stock market data showed there were buy orders at RM1.30, which was just five sen above its offer price of RM1.25, in pre-opening trade.

Some 63.4 million new shares were issued, of which 10 million were allocated for the public. This portion was oversubscribed by 10.8 times.

Hwang DBS Vickers Research fair value was RM1.50 based on FY12 price-to-earnings of 12 times.

http://www.theedgemalaysia.com/b ... lightly-higher.html

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发表于 2011-7-13 21:32 | 显示全部楼层
OldTown active in otherwise cautious market      

KUALA LUMPUR: Newly-listed OldTown Bhd was actively traded on Bursa Malaysia as key Asian markets started on a cautious note on Wednesday, July 13 after the weaker overnight close at Wall Street following Moody’s cutting Ireland’s credit rating to junk status.

Investor sentiment at the regional markets was also guarded ahead of second-quarter gross domestic product data from China, which is expected to show robust economic growth cooled slightly to 9.4% from a year earlier, according to Reuters.

The FBM KLCI edged up 0.06 point to 1,578.16 at mid-morning.

Gainers led losers by 181 to 150, while 205 counters traded unchanged. Volume was 162.47 million shares valued at RM181.47 million.

At the regional markets, Japan’s Nikkei 225 inched up 0.01% to 9,926.81, Hong Kong’s Hang Seng Index up 0.34% to 21,737.31, the Shanghai Composite Index gained 0.24% to 2,761.23 and South Korea’s Kospi rose 0.29% to 2,115.84.

Meanwhile, Singapore’s Straits Times Index fell 0.14% to 3,073.17 and Taiwan’s Taiex shed 0.04% to 8,487.81.

BIMB Securities Research said the Euro-zone was facing a never ending crisis, as right after the Greece tragedy and concerns over Italy, Moody’s served up another appetiser by downgrading Ireland’s credit rating to junk yesterday.

As a result, Wall Street saw some last minute selling after a rather steady morning trading session, it said in a note July 13.

“For us, we reckon the lack of fresh catalyst would see trading taking cue from regional bourses performance but expect there to be a technical rebound after breaching the 1,580 support level.

“Next level of support is seen at the 1,565 level,” it said.

On Bursa Malaysia, debutant OldTown was the most actively traded counter with 33.26 million shares done. The stock added five sen to RM1.30.

Other actives included TMS, Talam, Muda, Flonic, XDL, DVM, Wijaya and Farlim.

Among the gainers, Dutch Lady rose 46 sen to RM19.46, Nestle 30 sen to RM47.70, HLFG 10 sen to RM13.40, Petronas Dagangan eight sento RM17.52, while Bintulu Port added six sen to RM6.70.

Decliners at mid-morning included Batu Kawan, Parkson, SOP, Choo Bee, Tradewinds and Selangor Dredging.

http://www.theedgemalaysia.com/b ... autious-market.html

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发表于 2011-7-13 22:04 | 显示全部楼层
OldTown’s fairly resilient earnings and yields likely to attract      
  
Café chain operator and coffee beverage manufacturer OldTown Bhd makes its debut on the Main Market of Bursa Malaysia today.

The company’s IPO was priced at RM1.25 per share. Some 63.4 million new shares were issued, of which 10 million were allocated for the public. This portion was oversubscribed by 10.8 times.

Another 33 million shares were offered for sale by the promoters of the company and placed out to identified investors. Based on its enlarged share capital of 330 million shares, OldTown will have a market capitalisation of about RM413 million based on the IPO price. The promoters and related parties will retain a 70.8% equity stake in the company after the public offering.

OldTown should fare well
Based on our forecast valuations, expected yields and growth prospects, we believe OldTown should do fairly well on its listing.

To be sure, investor sentiment on the broader market has been somewhat skittish in recent weeks on the back of growing external uncertainties. Several recent IPOs have also suffered heavy selling pressure on their debuts.

For instance, stock prices of MClean Technologies and XOX have fallen well off their initial offer prices. Both were listed on the ACE Market without any profit track record and reported losses in 1Q11. But even the performance of profitable UOA Development has been disappointing, now trading below its IPO price.

On the other hand, the listing of MSM Holdings has been far more successful. Shares in the country’s largest sugar refiner, and part of the Felda group, surged 40% on the first day of trading. The stock is now trading 66% above its retail IPO price.

Not all IPOs under-perform. Investors likely warmed to MSM’s relatively defensive earnings, dominant market position, steady growth prospects and expectations for yields.


OldTown products are also expected to 12 countries including Singapore, Hong Kong, Thailand, Taiwan and as far as the US.

Established and well-known OldTown White Coffee brand name
OldTown shares some of its characteristics. It is an established and well-known brand name, being the second largest café chain operator in the country with 171 outlets nationwide.

The company traces its roots back to 1999 when its founders successfully formulated and commercialised their own blend of 3-in-1 instant white coffee under the OldTown brand name. Today, its product range has expanded to include several instant white coffee mix variations, instant milk tea, three types of roasted coffee powder — marketed under the Nan Yang brand name — as well as canned ready-to-drink white coffee.

These products are sold through a wide distribution network including hypermarkets, convenience stores, petrol kiosks and other food services outlets. OldTown products are also exported to 12 countries including Singapore, Hong Kong, Thailand, Taiwan and as far as the US.

Second largest café chain operator in the country
In 2005, the company expanded its operations downstream, into the food services sector by opening a chain of café outlets based on the traditional coffee shop setting and ambience under the OldTown White Coffee brand name.




In less than seven years, the company has expanded its café chain to 171 outlets in the country — including both wholly/partly owned and franchised/licensed outlets. In addition, it also has nine café outlets in Singapore and two more in Indonesia.

Last year, the café operations contributed to about 65% of the company’s total revenue with the balance from the beverage manufacturing arm. Going forward, OldTown intends to grow both businesses in tandem.

Twin pillars of growth
The café chain business is very scalable and has grown from 75 to 175 outlets over the past three years. That is an average of 33 new outlets every year. As at May 2011, the company has added seven more outlets to its stable and intends to open another 27 new ones by the end of the year. This will bring the total number of outlets to 209 by end-2011.

If all goes to plan, the company hopes to have a chain of about 300 outlets by 2014. About half of the new outlets are expected to be franchised. To be sure, margins are lower compared with wholly-owned outlets — royalty income is 5% of gross revenue compared with the estimated margin of 10%-15% for an average café outlet. But the franchise business model allows the company to expand quickly without straining its resources and balance sheet.

To maintain consistency over the quality of food served at the café and enhance operational efficiencies, all the food ingredients are sourced and processed at three centralised food processing centres in Ipoh and Subang Jaya. Processed food is then distributed to the company’s warehouses and to the café outlets.

Intense competition expected in café business
Competition in the café business is intense, including from similar-themed café chains like PappaRich, other popular franchises such as Starbucks Coffee and Secret Recipe as well as the entire spectrum of food outlets.

But the company believes that it can hold its own with its specially formulated blend of white coffee and tea beverages, extensive menu of local fare and most importantly, affordable prices. Some of its most popular menu items include kaya and butter toast, soft boiled eggs, nasi lemak, curry mee and Ipoh chicken hor fun.

Indeed, earnings from the café operation have been rising steadily over the past few years. Revenue expanded at a compounded rate of 51.3% per annum between 2007 and 2010 while net profit grew at a slightly higher compounded annual rate of 52.1% over the same period.

We expect growth to remain in the double digits, albeit at a slower pace due to the larger base effect.

Expanding footprint overseas
We do, however, expect the café chain operation to hit saturation at some point, probably beyond the next three years. With this in mind, OldTown is aiming to widen its addressable market base by expanding into neighbouring countries.

Whilst this will inevitably carry a higher degree of risks, the company can draw on its experience thus far. Currently, OldTown has 11 café outlets — both wholly and partially-owned — in Singapore and Indonesia. Indeed, five of its 27 new café outlets planned for 2H will be located in the two countries.

At the same time, the company is aiming to widen the export market for its instant white coffee and tea as well as roasted coffee powder products. On the drawing board are plans to penetrate the Iranian market by 4Q and expand further into the huge Chinese market. OldTown is currently the second best-selling instant coffee mix in Hong Kong.

To cater to the expected growth in its beverage manufacturing arm, OldTown is setting up a new factory in Ipoh. When completed, targeted by end-2013, production capacity will increase by five times. The new factory will also centralise the company’s manufacturing activities under one roof to improve efficiencies.

Revenue and net profit for the beverage manufacturing arm grew at a compounded rate of 41.7% and 31.2% per annum, respectively, between 2007 and 2010.

Steady earnings growth, modest valuations with fairly decent yields
We estimate net profit for the company at roughly RM35.4 million this year, up 12% from 2010. That is equivalent to earnings of 10.7 sen per share and prices the stock at a fairly modest 11.7 times forward
P/E multiples — compared with the average valuation for the broader market of about 15 times.

We believe the company can maintain a similar pace of growth over the next few years. Additionally, OldTown has adopted a dividend policy to pay out a minimum 50% of annual net profit. Based on our forecast, dividends would total 5.4 sen per share, translating into a pretty decent yield of 4.3% at the IPO price of RM1.25.

OldTown has a small net debt of RM2.2 million, before taking into account net proceeds from the IPO totalling RM74.2 million, after netting off listing expenses. Thus, the company would revert into a net cash position after listing. The bulk of the proceeds — RM58 million — will be used to up its stakes in partially owned café outlets and to fund the expansion of the beverage manufacturing arm.

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