Oriental Kopi sell-off amid boycott unwarranted, says HLIB

 Kopitiam chain operator’s sales has remained resilient despite its menu controversy, says Hong Leong Investment Bank.

Calls to boycott Oriental Kopi outlets arose after a social media user highlighted the absence of a Malay translation in its menus. (Instagram pic)

PETALING JAYA:

The recent sell-off of Oriental Kopi Holdings Bhd shares following boycott calls over its omission of the national language in its menus is unwarranted, said a research house.

Hong Leong Investment Bank (HLIB) also said calls to boycott its kopitiam outlets had so far not affected sales, with no significant change in outlet footfall.

“We remain constructive on Oriental Kopi, as our call with management suggests the recent boycott calls over its menu language have, thus far, not impacted sales,” it said in a note.

The controversy blew up in early October after a social media user complained about the absence of a Malay translation in its menus, which are in English and Chinese.

Its shares have dropped as much as 10% in the aftermath of the menu controversy. It closed at 82 sen today, valuing the group at RM1.64 billion.

Its shares, which have been on steady decline since February, have fallen 42% year to date due to a combination of earnings misses, margin compression, and high expansion costs.

The menu backlash prompted Oriental Kopi founder Calvin Chan to apologise and promise improvements.

The company has since completed the design of a new trilingual menu, with the reprinting cost estimated at RM150,000 for about 2,000 menu books.

HLIB considers the management’s response to the controversy “proactive and constructive”.

The bank maintained its “buy” call on the stock with an unchanged target price of RM1.17 a share and views the recent share-price weakness as “an attractive entry opportunity”.

It also kept its earnings forecasts unchanged and expects FY2026 core net profit to touch RM67 million.

Known for egg tarts, coffee and local dishes served in the tradition of Chinese coffee shops, Oriental Kopi was listed on the Ace Market in January 2025.

Its share price nearly doubled on its debut to 87.5 sen from its IPO price of 44 sen.

Founded in Johor in 2020, the group operates more than 30 outlets in Malaysia and Singapore and is targeting the opening of about 10 outlets annually. - FMT