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EPIC

Building the Largest Internet Restaurant Company in ASEAN

SUMMARY VIDEO

COMPANY DETAILS

SUMMARY

EPiC is an internet restaurants company that uses data and technology to solve a new normal problem – deadweight loss in online food delivery industry, particularly inefficient pricing in prepared, delivered meals.

Epic Kitchen, that features EPiC OS and chef-less operating model, enables us to help consumers save money, save time and enjoy good food safely.

We are a hyper growth, already profitable internet restaurants company.

  • Our sales in 2021p reaches MYR 12.2mn with 208.7% CAGR in the 2019 – 2021 periods.

  • Our Epic Kitchen operation records 17.0% EBITDA in 2021p.

  • Our group level records 5.5% EBITDA, 3.9% PAT and Cash Flow Positive in 2021p.

  • We operate over 90 internet restaurants with a highly effective omnichannel strategy.

  • We serve over 800K meals yearly with repeat purchase rate of 54.4%.

  • We are able to set up Epic Kitchens with payback time as short as 3 months i.e., 6.7x faster than the industry average. These break-even points enable rapid expansion almost anywhere.

  • First and only internet restaurants company halal certified by JAKIM since 2017.

We are excited to provide an opportunity for investors and customers who believe in the future of food delivery and to participate in our exponential growth. With the capital raised, we are rapidly expanding our Epic Kitchen locations to offer affordable, quality meals to everyone.

  • Minimum investment at MYR 2,475.00 for 150 shares.

  • MYR 33.0mn valuation on 2.7x sales multiple (“P/S”) vs Rebels Foods (USD 1.4bn valuation on a 9.3x P/S), Kitopi (USD 1.2bn valuation on a 16.9x P/S) and Just Kitchen (CAD 79.7mn valuation on a 43.6x P/S).

  • Potential gain of 8.2x to 31.0x of the initial investment in 3 years’ time.

 

PROBLEM

Online food delivery is the new normal post pandemic. The traditional F&Bs are unable to meet the rising demand effectively due to their antiquated operating models and the lack of innovation.

A deadweight loss is observed. Consumers are faced with prepared, delivered food that is expensive, lack of choices and poor quality.

Inefficient Pricing
  • Traditional restaurants are not built for on-demand food delivery services.

  • Traditional restaurant operators tend to mark up around 30% to their in-store menu pricing when their menus are listed for online food delivery service.

  • The mark up margin is passed on to the consumers to cover the delivery cost incurred by the restaurant operators. And the consumers still need to pay for the delivery fees.

  • The price paid by the consumers for prepared, delivery food includes both the 30% mark up and the delivery fees. The price is highly inefficient.

Limited Choices
  • Consumers’ food missions are not correctly addressed.

  • Menus curated for online food delivery are not what consumers really want.

  • Poor product-market fit due to long innovation cycle and lack of data.

Food Safety
  • Consumers do not know where their food comes from amidst the rise of dark kitchens or cloud kitchens.

  • Food safety of prepared, delivered meals lacks governance and robust SOPs.

 

SOLUTION

Our tech-driven Epic Kitchen has proven to offer food that is priced 30% to 50% more affordable than our respective competitors, profitably.

We are building EPiC OS that is designed for operation excellence, scalability and profitability.

Epic Kitchen runs a One Kitchen, Multi-Brands operating model to host multiple internet restaurants with shared labour force, kitchen equipment and raw materials. Notably, Epic Kitchen is chef-less.

Each and every one of our Epic Kitchen is continuously being optimised for its productivity and production output by analysing its labour productivity, kitchen flows, production heatmap, inventory turnover and etc. We had made a total of 8 changes in all our Epic Kitchens over the past 2 years in conjunction with the robust sales growth. Every improvement recorded at least 50% increment in output production. And the Kaizen never stops.

Our Epic Kitchen, powered by EPiC OS, empowers us to

  • Tackle inefficient pricing through economies of scales;

  • Tackle limited choice by addressing unique food missions; and

  • Ensure food safety through our state-of-the-art kitchen that is halal certified by JAKIM.

 

MARKET SIZE

Global online food delivery market is expected to grow by 10.4% CAGR to reach USD 401.4bn by 2025. Southeast Asia online food delivery market is expected to grow by 14.1% CAGR to reach USD 4.5bn by 2025. Malaysia online food delivery market is expected to grow by 12.97% CAGR to reach MYR 1.9bn by 2025.

Notably, our addressable market includes all demographics in Malaysia, attributable to our halal certification by JAKIM.

 

TRACTION

We record strong top-line growth despite Covid-19. We continue to record robust sales growth amidst the reopening of economy.

We have an 8-years head start in the online food delivery industry. Today, we are equipped with deep industry knowledge, strong relationships with stakeholders and loyal customer base.

  • 90+ internet restaurants, 3 Epic Kitchens, 1 Central Kitchen

  • Halal certified by JAKIM since 2017

  • 70+ employees with average age of 25 years old

  • Over 100 trusted Halal-certified OEM suppliers, raw material suppliers, marketing agencies, contractors and other vendors

  • Over 800,000 meals served yearly

  • Customer Acquisition Cost (“CAC”) of MYR 5.0

  • Repeat customer purchase rate of 54.4%

  • Sales grow by 208.7% CAGR in the 2019 – 2021p periods

  • EBITDA Margin per Epic Kitchen at 17.0%

  • Group level EBITDA at 5.5%, PAT at 3.9%, Cash Flow Positive

 

BUSINESS MODEL

Our business model is sustainable and resilient in any economic condition.

Our sales continue to grow robustly post-lockdown, demonstrating the food delivery trend is highly secular and not a short-lived pandemic driven trend.

Our revenue model comprises two revenue levers i.e. number of internet restaurants and number of Epic Kitchens, the key components to our business model’s high scalability. The first lever requires zero capital expenditure and is highly scalable. It sets us apart from the traditional F&Bs.

Epic Kitchen features an integrated kitchen, powered by EPiC OS and cross-trained workforce designed to fulfill orders across multiple internet restaurants. Our current Epic Kitchen setup

  • Has increased kitchen productivity by 203% compared to in 2019;

  • Has reduced labour requirement by 75% compared to in 2019; and

  • Has reduced rental rate by 72% compared to in 2019.

Our business model strongly outperforms the industry benchmark.

Our same store sales growth is 117.9% compared to 7.3% in the industry. It is strongly attributable to our scalable revenue model.

Our EBITDA to net Sales is 17.0% compared to 12.8% in the industry. Our labour cost is 6.9% compared to 28.0% in the industry, and our sales per square feet is MYR 5,078 compared to MYR 1,672 in the industry. This indicates high labour productivity and efficient kitchen operation in Epic Kitchen.

Our rental is 1.7% compared to 6.0% in the industry as our kitchen does not need to be located at prime area with high footfalls.

Our repeat customer rate is 54.4% compared to 28.8% in the industry, indicating high stickiness in our products.

COMPETITORS

The online food delivery industry is monopolistically competitive.

F&B businesses in both online and offline are experiencing increasingly-shorter business and product cycle strongly attributable to the increasingly-fickle consumer behaviours and low barrier of entry and high substitutability enabled by technology and internet.

Consumers’ needs and wants for food (food missions) are unique. They are determined by consumer activities, dietary spread, and type of days and time of days. Consumers’ food missions can move from staple value meals to cosmopolitan occasional meals within a day. In each of the food missions, consumers typically look for authenticity.

We can compete effectively in this monopolistic industry.

Halal certified by JAKIM since 2017

  • We are the first and only internet restaurants company that is halal certified by JAKIM since 2017.

EPiC Operating System

  • Tech-driven, chef-less kitchen, deep integration API assets.

  • We are collecting thousands of customer data and operation data daily.

Short innovation cycle

  • A core team of food engineer and chef, driven by data analytics.

  • Our innovation cycles take 1 week – 4 weeks to launch a new internet restaurant brand that offers more than 10 menu items.

  • Our agile iterative approach in product development and improvement enables us to achieve product-market fit quickly.

8-years of head start

  • We are equipped with deep industry knowledge, strong relationships with stakeholders and loyal customer base.

  • We know what consumers want and we know what we do.

Strong brand building capability

  • Data-driven brand building capability.

  • Built a number of meaningful brands with material financial impacts. They are Epic Food Hall, Epic Fit Meals Co., Pak Adam’s Nasi Lemak, New York’s Patty ‘n Toast, Noryangjin Cupbob and Bachelor’s Pizza Co.

  • Repeat customer rate at 54.4%.

Strong cost control capability

  • Robust operating DNA among our people.

  • Strong performance against industry benchmark in prime costs.

  • Our raw material cost at 27.2% and our labour cost at 6.9%.

 

TEAM

Lai Wick Kee – Co-Founder & CEO

  • 8 years experience of internet F&B, traditional F&B and online food delivery

  • Primarily responsible for business management, marketing, finance, internet of things, strategic planning and strategy execution for the company

  • Master of Applied Finance (Dean List, Monash University Caulfield), Bachelor of Business (Dean List, Monash University Caulfield), CFA

Chung Wen Chuan – Co-Founder & COO

  • 8 years experience of internet F&B, traditional F&B and online food delivery

  • Created 30 brands, 90 internet restaurants and over 200 food products

  • Designed 21 kitchen layouts

  • Managed more than 800 kitchen staff

  • Bachelor of Engineering (Hons)

Dr Tan Chin How – Co-Founder & Advisor

  • Co-founder & Director of Protégé Associates

  • 18 years experience in capital market

  • Expert in strategy, management, brand consulting, market research and corporate exercise

  • DBA, MBA, B.Sc. Computing, Microsoft Certified System Engineer

Scott Tong – Advisor

  • More than 15 years of experience in investment banking and capital markets

  • Former Executive Director of Oppenheimer & Co. Asia IBD

  • Involved in over 40 Nasdaq/NYSE IPOs of JD.com, New Oriental Education, Perfect World, Autohome, etc.

  • Former Associate of CIBC World Markets China Equity Research covering China TMT ADRs including Shanda Interactive, Focus Media, Netease, etc

  • MSc. E-Commerce (University of Liverpool); BSc. Computing (University of Portsmouth)

VISION

We are building the largest internet restaurants company in ASEAN.

We target to build over 460 internet restaurants in 5 years. We are projected to grow by 67.7% CAGR in the 2021 – 2026 periods to reach MYR 161.9mn in sales with profit after tax of MYR 42.4mn.

In near term, we are to expand revenue channels, build strong brand equities, expand margins, build barrier of entry via scales and tech stack.

INVESTMENT OFFER

Our business is comparable to other food tech startups like Rebel Foods (USD 1.4bn valuation on a 9.33x sales multiple), Kitopi (USD 1.2bn valuation on a 16.85x sales multiple) and Just Kitchen (CAD 79.7mn valuation on a 43.55x sales multiple).

We are offering our business at MYR 33.0mn valuation on a 2.70x sales multiple.

Your potential gain is in the range of 8.2x and 31.0x of your initial investment in in 3 years time.

Update: We are valued at MYR 298.5mn by Equidam. We are offering our business at MYR 33.0mn valuation. Our intrinsic value is 9x richer than our current offer.

The report can be download at https://drive.google.com/file/d/1wJNOsoQ5MkHVjvKxfhNiiLC7xUNzjcUw/view

FUNDING

PRESS

Your Friendly (Online) Neighborhood Food Hall

https://www.bfm.my/podcast/enterprise/open-for-business/ent-ofb-your-friendly-online-neighborhood-food-hall

Delivering Epic Meals

https://bfm.com.my/podcast/enterprise/open-for-business/enterprise-delivering-epic-meals-lai-wick-kee-epic-meals

MCO a big win for online food deliveries and cloud kitchens

https://www.theedgemarkets.com/article/mco-big-win-online-food-deliveries-and-cloud-kitchens

Remote kitchens gaining ground

https://www.thestar.com.my/business/business-news/2020/07/18/remote-kitchens-gaining-ground

An epic venture

https://www.thestar.com.my/business/smebiz/2018/01/22/an-epic-venture

Surviving This Partial Lockdown

https://vulcanpost.com/692511/malaysia-fnb-restaurants-survival-strategies-covid-19/

Epic Fit Meals Co. Delivers Within 45 Minutes, But Is Way Healthier Than Domino’s

https://vulcanpost.com/352821/epic-fit-meals-food-delivery/

8TV Epic Fit Meals Co.

https://www.youtube.com/watch?v=qqP9ox-Tlao

Astro AEC & Asian Food Channel – Honest Kitchen

https://www.youtube.com/watch?v=xvLkBi0Iyao

https://www.youtube.com/watch?v=cjVdW2Ymsyo

Astro V Buzz Epic Fit Meals Co.

https://www.youtube.com/watch?v=gXNjOgOsvHw&t=69s

NST - ''What bett er way to encourage people to vote than free burgers?''

https://www.nst.com.my/news/politics/2018/04/358668/what-better-way-encourage-people-vote-free-burgers

China Press 大選日秀黑指-餐廳請吃漢堡包

https://www.chinapress.com.my/20180416/%E5%A4%A7%E9%81%B8%E6%97%A5%E7%A7%80%E9%BB%91%E6%8C%87-%E9%A4%90%E5%BB%B3%E8%AB%8B%E5%90%83%E6%BC%A2%E5%A0%A1%E5%8C%85/

Sin Chew Daily 雪隆区快餐店,投票日送汉堡包

https://www.sinchew.com.my/content/content_1747190.html

NTV7 Feel Good Show7

RTM Faces and Places

Malay Mail Online – Wholesome food choices

https://www.malaymail.com/news/eat-drink/2018/08/13/wholesome-food-choices/1661798

TimeOut KL – Best Lunch Delivery in KL

https://www.timeout.com/kuala-lumpur/restaurants/reviewed-lunch-deliveries-in-kl

Malaysia Tatler – Top 5 healthy food delivery in Klang Valley

https://www.tatlerasia.com/dining/digest/top-5-new-healthy-food-delivery-services-in-klang-valley

DISCLAIMERS
  • No shares will be allotted or issued based on this document after six months from the closing of the offer period.
  • This issue, offer or invitation for the offering is a proposal not requiring authorisation of the Securities Commission under section 212(8) of the CMSA 2007.
  • This document has not been reviewed by the Securities Commission Malaysia. The Securities Commission does not recommend nor assumes responsibility for any information including any statement, opinion or report disclosed in relation to this fund raising exercise and makes no representation as to its accuracy or completeness. The Securities Commission expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the information disclosed.

Please login as an investor to see more information.

28
JAN

EPiC's Q4 2021 earnings beat estimates amid the lift of MCO.

8 months ago by LAI WICK KEE
draft

Our Q4 2021 earnings beat estimates amid the lift of MCO. Our business model is proven to be sustainable and resilient in any economic condition.

Our financials continue to grow robustly post-lockdown, demonstrating the food delivery trend is highly secular and not a short-lived pandemic driven trend.

  • Our sales in Q4 2021 records MYR 4.31mn, up 78.8% versus prior year fourth quarter.
  • Our  Epic Kitchen operation in Q4 2021 records 21.7% EBITDA to net sales versus 14.9% in prior year fourth quarter.
  • Our group level in Q4 2021 records 12.1% EBITDA to net sales versus 7.3% in prior year fourth quarter.

28
DEC

EPiC is valued at MYR 298.5mn by Equidam; the intrinsic value is 9x richer than our current offer.

9 months ago by LAI WICK KEE
draft

We are valued at MYR 298.5mn by Equidam in December 2021.

We are offering our business at MYR 33.0mn valuation.

Our intrinsic value is 9x richer than our current offer.

Download our Equidam report: https://drive.google.com/file/d/1wJNOsoQ5MkHVjvKxfhNiiLC7xUNzjcUw/view?usp=sharing

Our valuation by Equidam:



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