Initiated small position at RM2.05.
Think most of us should be familiar with old town white coffee and its café outlets.
Its core biz includes cafes and the manufacturing & selling of beverages (think instant coffee mix)
Old town is a market leader in white coffee,
established in Singapore/Malaysia and growing its presence in China, Indonesia & Australia.
I like its bold, clear and focused vision: to be Asia Pacific Leading White Coffee Brand.
A net cash company, growing earnings with potentially double digit growth over the coming years, given the large potential market in China and especially in its sale of beverages.
They are well capable of ramping up production to meet that potential increase in demand, as the plant is currently being underutilised at only 40%.
Dividends only approx. 3.5% at current prices, but I am counting on a dividend growth thesis, if it maintains its 50% dividend payout, we should be looking at a more than 4% dividend yield after 3 years.
At PE 17, taking into account growth prospects, I think the price is reasonable.
But it is NOT cheap, hence don't dare to buy more, just hope that opportunity will present itself in the later part of the year...
No comments:
Post a Comment