KUALA LUMPUR (Sept 25): OldTown Bhd shares rose 1.56% at the midday break today, after there was minimal impact in an explosion at the central food processing centre of its wholly-owned subsidiary Emperor’s Kitchen Sdn Bhd last Thursday, coupled with its current price weakness which offers a buying opportunity.

At 12.30pm, OldTown share rose four sen to RM2.60 with 584,500 shares done, for a market capitalisation of RM1.2 billion. Year to date, the stock has gained about 36%.

In the bourse filing last Thursday, OldTown said the fire department and the police, as well as the management, are conducting investigations to ascertain the cause of the explosion.

Food processing operations at the plant have temporarily ceased and are expected to re-commence via auxiliary means in the shortest time possible, in order to mitigate any supply disruption to chain outlets.

OldTown said the incident has no impact on the coffee and beverage manufacturing and warehousing facilities.

Meanwhile, AllianceDBS is maintaining its “buy” rating with target price of RM3.15.

“The stock remains our top pick in the consumer sector. The recent share price weakness offers buying opportunities,” the research house said.

In the note review today, its analyst Cheah King Yoong said the management is actively pursuing merger and acquisition (M&A) opportunities to enhance its growth prospects.

“The stronger than expected contributions from its regional fast moving consumer goods sales should provide further upside surprises,” he said, adding that OldTown expansion to regional markets, particularly China, offers multi-year growth potential.