Old Chang Kee AGM 2025: Dividend, Expansion, and Buy-back – What Retail Investors Should Watch

Key Takeaways from Old Chang Kee’s 20th Annual General Meeting

Old Chang Kee Ltd., Singapore’s beloved curry puff and snack chain, held its 20th Annual General Meeting (AGM) on 28 July 2025. For retail investors, the meeting unveiled a host of significant resolutions, operational updates, and shareholder queries that could influence the company’s share price in the coming year.

1. Dividend Announcement – Lower Than Historic Levels

Shareholders approved a final tax-exempt (one-tier) dividend of 1.0 Singapore cent per share for FY2025. While this payout was approved with overwhelming support, one shareholder openly requested a return to the previous 3 cent payout. The Board responded that such a commitment cannot be made at present and future dividends would depend on company performance and potential M&A activity. This lower dividend may signal caution and could impact investor sentiment, especially for those seeking income from their investments.

2. Share Buy-back Mandate – Significant Support Despite Opposition

Old Chang Kee’s management secured approval for the renewal of its Share Buy-back Mandate, with 84.19% of votes in favour and 15.81% against – a notably higher level of opposition compared to other resolutions. The buy-back allows the company to purchase up to 10% of its issued shares, either on-market (up to 5% above the average closing price over the last five trading days) or off-market (up to 20% above the average). Buy-backs can support the share price, but the sizable minority opposition may reflect investor concerns on capital allocation or market liquidity.

3. Authority to Issue New Shares – High Approval, But Dilution Risk

Shareholders also gave management the authority to issue new shares up to 100% of the existing share capital (excluding treasury shares and subsidiary holdings), with up to 50% allowed on a non-pro-rata basis. This resolution saw similar support and opposition levels as the buy-back mandate. While providing flexibility for growth, this opens the possibility of dilution, especially if Old Chang Kee pursues acquisitions or raises capital for expansion.

4. Expansion in Singapore and Overseas – Retail and Franchise Developments

• Singapore: The company opened two new outlets in the last year, with two more planned. Expansion into hospital food spaces appears promising, with healthier product offerings like low-sodium wholemeal puffs. The National Library outlet is performing well, while the Changi Airport T4 outlet was affected by the departure of Jetstar airline. Management clarified there is no fixed target for new outlets each year and unprofitable outlets have been closed, reflecting a focus on operational efficiency.
• Malaysia: The Johor Bahru (JB) retail business is operated under a franchise model, with KSL Mall and City Square Mall outlets well-supported. However, finding suitable retail spaces with required exhaust systems remains a challenge.
• Australia: The Perth outlet is under review after a slight loss, with potential expansion into Sydney and Melbourne being considered, pending suitable partners. Overall, overseas franchise contributions are less than 5% of total revenue and are not material to segmental reporting.

5. Catering, Delivery, and Frozen Foods – Diversification of Revenue Streams

The catering and delivery segment, historically a growth driver, saw a slight slowdown in FY2025, mainly due to changes in suppliers by major customers like Singapore Airlines and Scoot. The company continues to partner with third-party delivery platforms rather than in-house delivery due to cost considerations. Frozen food products are also in focus, with a current shelf life of one year and ambitions to extend this through technology and safety credentialing in Malaysia. Expansion in catering and food trucks (e.g., for National Day Parade events) is ongoing, with a product range now including kuehs, sandwiches, and steamed buns.

6. Operational Costs – Rising Labour and Rental Pressures

Labour costs have increased by more than 5% annually, particularly due to the Government’s progressive wage model affecting 300-400 of the company’s 700 employees. Rental costs have also risen, typically by 8-9% per year, accounting for about 15% of outlet sales. The company is responding by expanding product ranges and improving labour efficiency in non-retail and delivery operations.

7. Net Profit Margin – Management of Rising Costs

Old Chang Kee’s net profit margin improved due to supply control and bulk ordering from neighbouring countries, but the second half of FY2025 saw margin pressure as retail prices remained unchanged despite rising costs. Management has refrained from price hikes where possible, prioritizing operational efficiency and customer value.

8. Health and Sustainability – Adapting to Market Trends

With Singapore’s aging population, the company is adjusting its menu to include healthier options and has implemented stringent controls on raw ingredients and frying oil quality across all outlets and franchises. The company is also preparing for more extensive sustainability reporting, having engaged internal and external consultants to ensure compliance.

9. Customer Feedback and Product Quality

Shareholders raised concerns regarding perceived reductions in product size and increases in price. Management assured that product quality and size have remained consistent and is receptive to improving the quality of drinks offered.

10. M&A Outlook – No Immediate Plans

Although management receives proposals for mergers and acquisitions, there are currently no concrete plans. However, the Board signals that M&A activity may influence future dividend decisions.

11. Curry Times Restaurant Expansion – On Hold

Despite having four Curry Times outlets in Singapore, manpower constraints mean no immediate plans for further expansion locally or overseas.

Potential Price-sensitive Factors for Investors

• Dividend policy remains conservative, with no commitment to return to historic levels.
• Share buy-back and new share issuance authorities provide flexibility but could impact share price via market support or dilution.
• Expansion into hospitals and new retail spaces may drive future growth, especially with healthy menu adaptations.
• Rising operational costs and the company’s ability to maintain margins without price increases are critical for profitability.
• M&A activities are not imminent but remain a possibility that could affect future dividends and share value.

Conclusion

Retail investors should monitor Old Chang Kee’s dividend decisions, buy-back executions, expansion plans, and cost management strategies closely. While the AGM did not announce any blockbuster corporate moves, the combination of cautious dividend policy, new share issuance, and buy-back flexibility, alongside ongoing expansion and rising costs, makes Old Chang Kee a stock to watch for both defensive and growth-oriented investors.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult a professional advisor before making investment decisions.

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