Oasis sets the table for profit with Chef Wan deal

OASIS Harvest Corp Bhd’s latest proposed acquisition of Metta Food & Lifestyle Sdn Bhd, which operates the famous Chef Wan banquet-themed chain of restaurants and cafes, is noteworthy.

The first striking point is that the RM30.8mil price tag for Metta exceeds Oasis’ current market capitalisation of RM25mil.

So, how can Oasis afford this acquisition?

The company says it will mainly borrow to fund the deal, but this raises questions about what will be used as collateral, especially if the market only ascribes such a small value to the listed company.

Still, Oasis’ move marks a bold expansion, with potential upside, considering the brand does enjoy a certain level of urban following.

Metta’s dining outlets trace their origins to celebrity chef Datuk Redzuawan Ismail, popularly known as Chef Wan.

Another issue, though, is that the deal is also a related-party transaction. One of Metta’s vendors, Datuk Seri Tan Ooi Han, is also the chairman of Oasis.

Nevertheless, the acquisition comes with a minimum two-year cumulative profit guarantee of RM5.6mil for the financial year ending June 30, 2025 (FY25) and FY26.

The guarantee comes from Tan and Andre Shum Khum Yuin, Metta’s CEO.

In terms of valuation, the filing used Metta’s forecast profit after tax (PAT) for FY26 of RM3.1mil, stating that the price tag translates into an implied price-to-earnings multiple of between 9.5 times and 11.1 times, which it said is comparable to other food and beverage (F&B) peers on Bursa Malaysia.

However, Metta only recorded a PAT of RM6,000 for the 12 months ended June 30, 2024, although its unaudited results for the 10 months ended April 20, 2025 showed a PAT of RM2mil.

Oasis has been loss-making for the FY20 to FY23 period, but managed to post a modest turnaround in FY24.

In the first quarter of FY25, however, it slipped back into the red compared to the same period a year ago.

Recall that Oasis was formerly known as Dolphin International Bhd, previously involved in the palm oil milling machinery sector. It diversified into the F&B sector five years ago.

The F&B sector is a highly competitive space and investors will be watching closely to see whether Oasis can truly cook up consistent returns from this acquisition.