Summary:
We initiate coverage of Kimly, known for its good food and affordable prices and an SG staple, with a BUY recommendation. Kimly has been strengthening its market presence in high density locations in HDB towns. Over the past 18 months adding 6 coffee shops & 5 food stalls.
HDB towns are undergoing significant expansion, the likes of which SG has not seen for many years. The building of new HDB BTO flats is visible almost everywhere in Singapore with a total of 497,000 planned. Ang Mo Kio and Woodlands, two of Kimly’s most important HDB markets, will increase in captive population size by 27% and 40% respectively.
Revenue/food outlet achieved organic CAGR of +2.1% post-Covid. We estimate potential ceiling for Kimly coffee shops to scale between 150 to 211 based on planned HDB growth and potential market share gains; implying ~ 7 new coffee shops annually for years to come, with a 6.5% uplift to revenues in 2026-27. New pipeline of 42 HDB coffee shops amongst BTO projects provides growth opportunities at lower prices.
Kimly is in a sweet spot with upcoming HDB estate intensification and recurring government food stamps (CDC vouchers). Kimly remains on track to hit $500 mil revenue by 2030F with an Intrinsic Value of $0.56, potential 42% upside.
George.Koh@rhtgoc.com
Paul.Schymyck@rhtgoc.com
