Tentative Date(s):

• Opening of application - 06 January 2025
• Closing of application - 10 January 2025
• Balloting of applications - 14 January 2025
• Allotment of IPO shares to successful applicants - 21 January 2025
• Tentative listing date - 23 January 2025

Company Background

The company was incorporated in Malaysia under the Act as a private limited company on 23 February 2024 under the name Oriental Kopi Holdings Sdn Bhd and was subsequently converted to a public limited company on 14 May 2024 under its present name Oriental Kopi Holdings Berhad. The company is an investment holding company. Through its subsidiaries, they are primarily involved in cafe chain operations as well as the distribution and retail of its brands of packaged foods. The cafe chain operates under the Oriental Kopi brand providing F&B services and in-store sales of its brands of packaged foods.

The corporate Group structure as at the LPD is as follows:

Use of proceeds

1. Set up of new head office,central kitchen and warehouse - 29.18% (within 36 months)
2. Expansion of cafes in various states within Malaysia - 19.79% (within 24 months)
3. Expansion of its brands of packaged foods segment - 2.72% (within 24 months)
4. Marketing activities in foreign countries - 2.99% (within 24 months)
5. Working capital - 41.19% (within 24 months)
6. Estimated listing expenses - 4.13% (within 3 months)

Business expansion

• Set up of new head office,central kitchen and warehouse - 29.18% (within 36 months)

The company intends to allocate RM53.69 million, representing approximately 29.18% of the gross proceeds from its Public Issue, to set up a 3-storey new operational facility in Selangor with an estimated total built-up area of approximately 108,448 sq. ft. for its new head office, central kitchen and warehouse (“New Operational Facility”) within 36 months from the Listing date. The New Operational Facility will be entirely utilised by the company Group as the head office, central kitchen and warehouse.

The estimated breakdown of the IPO proceeds used for setting up the New Operational Facility are as follows:

i. Acquisition of land and building construction

As at the LPD, the company has identified a leasehold land with a total land area of approximately 3 acres in Puchong, Selangor to establish the New Operational Facility. The estimated cost for the acquisition of the land is approximately RM18.37 million, which will be funded via bank borrowings and IPO proceeds. The company intends to allocate RM9.19 million of the proceeds from its Public Issue to pay part of the purchase consideration of the land and the remaining purchase consideration will be funded via bank borrowings. As at the LPD, the company has not entered into a sale and purchase agreement with the land owner.

A building will be constructed on the land to accommodate the New Operational Facility. The estimated cost for the building construction is approximately RM30.00 million which will be funded using IPO proceeds.

ii. New head office

The company intends to allocate RM6.50 million of the proceeds from its Public Issue, to fund the cost of setting up a new head office as follows:

By setting up a new head office, the company will be able to house/accommodate its office staff and equipment, ICT personnel to monitor information from all cafes and to carry out R&D for new or enhanced recipes and products. The company will relocate its existing head office to this New Operational Facility upon the completion of the building by Q4 2026.

iii. New central kitchen and warehouse

​The company intends to allocate RM8.00 million of the proceeds from its Public Issue, including but not limited to the purchase the following key equipment for the central kitchen and warehouse:

By setting up a new central kitchen, the company will be able to carry out as much as possible the preparation and cooking of F&B to reduce the workload of its existing cafes as well as the impending new cafes to be established. With the central kitchen, the cafes will only carry out minimal final preparation, cooking and plating to complete the dish ready to be consumed in the cafes. The central kitchen is also expected to improve operational efficiency, quality and food safety as well as optimise the usage of space, equipment, kitchen workers and production. In addition, the company intends to relocate its existing warehouse at TPP3 to this New Operational Facility upon completing the building by Q4 2026. It will be equipped with a racking system and forklifts to cater for the temporary storage of foods and ingredients before delivering to the respective cafes as well as its brands of packaged foods, consumables and other materials.

Any excess amount required for the above costs will be funded by internally generated funds and/or bank borrowings. Conversely, if the actual amount for the above costs is lower than budgeted, the excess will be used for working capital purposes to purchase materials for F&B services and distribution and retail of its brands of packaged foods.

Expansion of cafes in various states within Malaysia - 19.79% (within 24 months)

As part of the business strategies and plans to expand the cafe chain operations in Malaysia, the company proposes to set up a total of 14 new owned-operated cafes progressively between 2024 and 2026 in various states, the details of which are as follows:

As at the LPD, the company has identified the locations for the 5 new cafes to be established in 2024 and 2025in Sarawak, Klang Valley, Penang and Johor. The company has entered into a letter of offer and/or tenancy agreement with the respective landlords of the aforementioned new cafes.

Pursuant to the above, the company intends to allocate RM36.40million, representing approximately 19.79% of the gross proceeds from its Public Issue, for the setting up of an additional 13 Oriental Kopicafes, within 24 months from the Listing date between 2025 and 2026. For the avoidance of doubt, the Oriental Kopi cafes to be set up in 2024 prior to the Listing will be funded via internally generated funds.

Any excess amount required for the above costs will be funded by internally generated funds and/or bank borrowings. Conversely, if the actual amount for the above costs is lower than budgeted, the excess will be used for working capital purposes to purchase materials for F&B and distribution and retail of its brands of packaged foods.

Expansion of its brands of packaged foods segment - 2.72% (within 24 months)

• Set up a new specialty retail store in Malaysia

The company intends to allocate RM2.00 million, representing approximately 1.09% of the gross proceeds from its Public Issue, to set up an additional 4 specialty retail stores in the central region of Peninsular Malaysia and Johor, within 24 months from the Listing date between 2025 and 2026.

The operation of the specialty stores is expected to increase the company’s overall brand awareness to benefit its cafe chain, which can showcase the full range of its brands of packaged foods to cater to domestic and foreign tourists.

• Set up new specialty retail store within Malaysia

The company intends to allocate RM3.00 million, representing approximately 1.63% of the gross proceeds from its Public Issue, for the marketing expenses for the brands of packaged foods segment in Malaysia, within 24 months from the Listing date.

The marketing activities are to enhance brand awareness and recognition as well as create positive brand image and quality, brand loyalty and enhance customer satisfaction to promote Oriental and Oriental Kopi brands of cafe and its brands of packaged foods to the mass market in Malaysia. The company will continue to utilise digital marketing to carry out advertisements and promotions on social media and other digital platforms as well as carry out in-store and joint promotions. The marketing activities are ongoing initiatives and the breakdown of which is unable to be determined now. Any excess amount required for the above costs will be funded by internally generated funds and/or bank borrowings. Conversely, if the actual amount for the above costs is lower than budgeted, the excess will be used for working capital purposes to purchase materials for F&B services and distribution and retail of its brands of packaged food.

Marketing activities in foreign countries - 2.99% (within 24 months)

The company intends to allocate RM5.50 million, representing approximately 2.99% of the gross proceeds from its Public Issue, for marketing expenses in foreign countries, within 24 months from the Listing date.

The company intends to expand its brands of packaged foods’ market reach in foreign countries to provide diversification. The company will carry out proactive marketing activities in foreign countries to create brand awareness in countries where they are not currently present, thereby giving the company the opportunity to address potential markets. This will take into consideration, among others, the population size, demographics, lifestyle and the potential market acceptance of its brand and product offerings.

As at the LPD, the company has yet to finalize its marketing activities in foreign countries. The company will participate in F&B exhibitions and events as well as other marketing activities to showcase its brands of packaged foods to secure resellers and increase the brand awareness. RM1.50 million of the IPO proceeds will be used to fund the marketing and promotional activities in Singapore, whereas the remaining RM4.00 million of the IPO proceeds will be used to fund the marketing activities in other foreign countries in Asia such as Hong Kong to promote our brands of packaged foods.

Any excess amount required for the above costs will be funded by internally generated funds and/or bank borrowings. Conversely, if the actual amount for the above costs is lower than budgeted, the excess will be used for working capital purposes to purchase materials for F&B services and distribution and retail of our brands of packaged foods.

Working capital - 41.19% (within 24 months)

The company Group’s working capital requirements are expected to increase in tandem with the expected growth in our business. The company intends to allocate RM75.78 million, representing approximately 41.19% of the gross proceeds from its Public Issue, to supplement the working capital requirements of the company Group as follows:

The company Group had in the past and currently been funding our working capital from internally generated funds. Therefore, the above working capital allocation from its Public Issue is expected to enhance the company Group’s liquidity and cash flow position to support the expected growth in the daily operations.

Business Model

The company’s business model is depicted in the following diagram:

Click here to continue the IPO - Oriental Kopi Holdings Berhad (Part 2)

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