KUALA LUMPUR (Feb 23): AmInvestment Bank Bhd initiated coverage on OldTown Bhd with a "buy" call and target price of RM3 on the beverage manufacturer and cafe operator's potential in China's "unsaturated” market.

AmInvestment analyst Philip Wong said OldTown's price-earnings valuation was also attractive.
 
"We believe that OldTown, the No 1 white coffee brand in its core markets, is poised to tap the relatively unsaturated China market. Valuations are a bargain as OldTown is trading at a 35% discount to its domestic-centric local peers and 50% to its direct peer Super Group.

"We are positive over OldTown’s sales channel distribution, which is focused on e-commerce in China. About 80% of its China sales are derived through these virtual stores," Wong said.