CoCo Ichibanya shares surge as Japan curry chain weighs sale

CoCo Ichibanya, Japan's leading curry rice restaurant chain, experienced a significant surge in its shares after its parent company, House Foods Group, announced its intention to explore options for the business. This news caused shares in the operator to rise sharply on the Tokyo stock market. House Foods Group, owning a 51% stake in Ichibanya, was reportedly considering a potential sale, which could include taking the restaurant chain private.

Following the confirmation of these reports, shares in CoCo Ichibanya jumped by 16%, resulting in a current market value of ¥174.2 billion (RM4.43 billion) as of Monday.

CoCo Ichibanya is renowned for its thick Japanese curry served with rice and a wide array of customizable toppings, such as pork cutlets, cheese, vegetables, and fried chicken. With nearly 1,500 outlets across Japan and internationally, including in the United States, Britain, and India, the chain has established itself as a popular dining destination.

Analyst Tsutomu Yamada of Mitsubishi UFJ eSmart Securities suggested that a change in majority ownership could offer Ichibanya a new growth phase. He believed that major buyers, including private equity firms, would likely be attracted to the company, potentially driving its shares up by an additional 30% if a sale were to occur.

Ichibanya and House Foods Group have confirmed their consideration of various options for the curry business, including privatisation. The popularity of Japanese curry stems from its affordability, familiarity, and the ability to customize it according to individual preferences. CoCo Ichibanya's pork katsu and seafood curries are among its most sought-after menu items, appealing to both Japanese office workers and tourists.

Moreover, Japanese-style curry has garnered international recognition, with Bank of New York Mellon senior strategist Geoff Yu recently using the chain's katsu curry as an indicator of purchasing power in the face of a weak yen. Yamada also highlighted the distinctive appeal of katsu curry, which he sees further potential for gaining a wider following overseas.