Hi Folks, welcome back to Investment Income for Life!
Today we are going to
discuss an interesting opportunity that has opened up for one of Singapore's
favourite coffeeshop operators - Kimly Ltd. The share price has pulled back
from its peak, and for patient dividend investors, this may be a window worth
paying attention to for both dividends and capital appreciation. Let's dive in.
1. The Opportunity: A 17% Discount To The
Recent Peak
On May 7, 2026, DBS
initiated coverage of Kimly Ltd. Applying a PE multiple of 18 times earnings,
the bank arrived at a target price of S$0.52 per share.
The market liked what
it heard. Kimly rallied to over S$0.44 by mid May 2026 on the back of the
bullish analyst report.
Here is the good news
for those who have not bought into Kimly yet. The share price has since cooled
off to S$0.365 per share as at Oct 15, 2026. Relative to the peak of S$0.44, that is a discount of
about 17% on your entry price. Measured against the DBS target of S$0.52, there
is a potential upside of roughly 42%, before dividends.
And speaking of
dividends - at S$0.365, the forward dividend yield works out to 5.48% per
annum. That is based on Kimly's steady S$0.01 per share payout made twice a
year (S$0.02 per year). Not too shabby for a business that sells kopi and
chicken rice to Singaporeans every single day.
2. Things To Note About The New Kimly: Moving
Up To The Mainboard
On August 17, 2026,
Kimly's board of directors decided to transfer the company's listing from the
Catalist Board to the SGX Mainboard. An EGM will be held in January 2027 to
seek approval from existing shareholders.
Why does this matter? A
Mainboard listing generally puts a company on the radar of a wider pool of
investors, including funds that are not allowed to invest in Catalist stocks.
This should hopefully boost trading liquidity, and in time, could help narrow
any valuation discount Kimly suffers as a Catalist counter.
3. A Shift Towards An Asset Heavy Model
Another point to note
is that Kimly seems to be embarking on a more asset heavy operating model. The
group recently announced the acquisition of a coffeeshop at Haig Road for a
purchase consideration of S$11.8 million.
The deal is financed
through a mix of:
a) External bank borrowings of S$5.8
million;
b) A shareholder loan of S$5.0 million; and
c) Internal cash reserves.
Owning the property
rather than leasing it gives Kimly more control over its outlets and protects
it from rental hikes. The trade-off is higher borrowings and more capital tied
up in bricks and mortar. As income investors, we will want to keep a close eye
on gearing, interest costs and, most importantly, whether the dividend payout
remains intact.
4. My Personal Action On Kimly Over The Last 6
Months
Full transparency,
folks. I sold off more than half of my stake in Kimly on May 7, 2026 when the
price shot up to S$0.42 per share. Locking in profits on a sharp, news-driven
spike seems to have paid off.
Thereafter, I bought
back some Kimly shares in the S$0.39 to S$0.405 range. Today, I just added additional shares at S$0.37 per share. I will be adding even more
shares soon if the current share price weakness persists. For me, Kimly remains
a steady dividend payer in a very defensive, needs-based business.
5. Kimly Share Price - The Past 12 Months At A
Glance
Here is how Kimly's
monthly closing share price has moved over the past 12 months:
A few observations from
the chart:
a) Kimly has traded in a fairly tight band
of roughly S$0.375 to S$0.43 on a monthly closing basis over the year. This is
a low volatility stock, which suits income investors well.
b) Trading volume spiked in January 2026
(about 20.0 million shares) and May 2026 (about 17.9 million shares), the two
months when buying interest was strongest.
c) The share price has drifted lower since
August 2026, which is exactly the kind of weakness long-term dividend investors
can use to accumulate.
6. Final Thoughts
Kimly offers a 5.48%
forward yield, a potential re-rating catalyst from the Mainboard transfer, and
a share price that sits about 17% below its recent peak. Do keep an eye on the
higher borrowings from the Haig Road acquisition, and as always, do your own
due diligence before investing. This post is not a buy or sell recommendation.
Ok folks, that's all
from me today. Have a great week ahead!
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