not vested
Oldtown shares edge up
KUALA LUMPUR: Oldtown Bhd's shares on Bursa Malaysia edged up in the morning session following a report on the company's regional growth potential.
At 11.04am, the counter added four sen to RM2.24 with 72,100 shares changed hands.
AllianceDBS Research in a research note today said riding on the rising coffee consumption in Asia, Oldtown's growth potential in the region was attractive, particularly in the coffee mix segment.
"We believe the company has a strong brand name that can capitalise on rising coffee consumption in the region," it said.
The research house said Asia's coffee consumption per capita at 0.5 kg per person per year is still significantly lower than other developed countries (3-4 kg).
"For instance, we see huge growth potential from China (48 gramme per capita) where Oldtown has cafe outlets in Guangdong province, extensive distribution network covering the key first and second tier cities, and its recent venture into the booming e-commerce industry in China via TMall.com, its flagship online store," it added.
However, AllianceDBS has lowered Oldtown's earnings forecast on anticipation of a slower expansion for its food and beverages segment as the local operating environment is increasingly competitive due to weak consumer sentiment.
"As a result, we have trimmed our earnings by 9-11 per cent for financial years 2015 and 2016.
The research house has maintained a ‘Buy’ call on Oldtown with a higher target price of RM2.55 from RM2.35 previously.
Source: Bernama