Latest news with #RM56.27mil
The Star
23-05-2025
- Business
- The Star
Eco-Shop rises 10% in Main Market debut
KUALA LUMPUR: The trading stock of Eco-Shop Marketing Bhd rose 10.62% from its initial public offering (IPO) price as trading of its shares commenced on the Main Market of Bursa Malaysia on Friday. Shares in the dollar-store retailer put on 12 sen to RM1.25 and charted at the top of the most actively traded counters on Bursa Malaysia. At the time of writing (9.25am), the share was trading seven sen higher at RM1.20 after 87.64 million shares done. Creador-backed Eco-Shop's IPO was the largest in Malaysia over the last eight months - raising RM419.87mil from the public issue of 347 million new shares. It plans to allocate RM56.27mil (13.4%) of the IPO proceeds to the expansion of its retail footprint nationwide, and another RM200mil (47.6%) to expand its distribution centres. Another RM10.9mil will be invested in information technology hardware and software. Of the remainder, RM100mil (23.8%) will be used to repay bank borrowings and RM52.7mil (12.6%) for working capital purposes and to defray the cost of the IPO and listing. According to an IPO note by Rakuten Trade, Eco-Shop's aggressive expansion plan in the next two to three years is expected to raise net profit to RM200.4mil and RM246.5mil in FY5/25 and FY5/26 respectively, "We peg a fair value of RM1.20 based on 28x PER (similar to its regional peers with similar scale) over FY5/26 EPS," it said. UOB Kay Hian, meanwhile initiated coverage on the stock with a "buy" call and target price of RM1.45. "Eco-Shop, Malaysia's most established fixed-price retailer, offers a compelling three-year earnings CAGR (FY24-27) of 17.7% which is unrivalled relative to that of its large-cap retail peers. "The earnings growth is underpinned by expansion off a long growth runway coupled with robust organic and resilient demand owing to its unique business model that offers affordability yet captures higher-margin discretionary purchases," it added.
The Star
09-05-2025
- Business
- The Star
Eco-Shop launches the year's biggest IPO to date
PETALING JAYA: Main Market-bound Eco-Shop Marketing Bhd aims to raise RM419.87mil via an initial public offering (IPO), which comprises 347 million new shares at a retail price of RM1.21 apiece. Slated to debut on the Main Market of Bursa Malaysia on May 23, 2025, Eco-Shop is estimated to have a market capitalisation of RM7bil upon listing, making it Malaysia's biggest IPO for this year as of now. Operating as a dollar chain store, Eco-Shop currently has about 350 stores nationwide and is planning to expand by opening up another 70 stores within one year after listing. Executive director and chief executive officer Jessica Ng said there are ample opportunities and space to increase the number of outlets in Malaysia. Despite not disclosing the specific locations for the planned outlets, she said the majority will be in underserved areas in the Klang Valley and states on the east coast. 'In the last 12 months, we focused a lot on Johor to maximise operational efficiency. 'But this year, we would like to open more stores in the Klang Valley. 'So, we hope we can make our presence more visible in the sector,' she explained during a press conference after the launch of Eco-Shop's prospectus here yesterday. That being said, the group has allocated about 13.4% of the proceeds or RM56.27mil for the expansion of new chain stores. When asked about the duration to reach breakeven per store, Ng said it would usually take about one year for each store to be profitable. She stated that the group is looking to enhance its warehouse and distribution capabilities by developing a new semi-automated distribution centre in Klang, Selangor. Eco-Shop will be acquiring a 307,560 sq- m-freehold medium industrial land for the construction of the distribution centre, with the deal to be financed via IPO proceeds amounting to RM200mil. 'This is in line with the growth in the number of our outlets,' Ng said. An allocation of RM10.9mil or 2.6% of the proceeds has been put aside as the group also plans to invest in IT hardware and software to further enhance and support daily operations. The remainder of the proceeds will be used to finance the repayment of bank borrowings, working capital and listing expenses at RM100mil, RM24.7mil and RM28mil, respectively. On that note, Ng stated that the group remains confident in its future prospects despite the current uncertainties within the global economic landscape. 'The consumer sentiment is definitely shifting and people are more budget-conscious as well. So, Eco-Shop is a brand that really fits into this good value proposition,' she said. On the trade war between the United States and China, she views it to be more advantageous for the group considering the opportunities presented from China's exports. About half of its products are imported and the remaining half are supplied locally. Additionally, Ng shared that the group will be expanding its house brands by improving product display and revamping packaging and products as well as product innovation. 'Our house brand represents 70% of our stock keeping units and reflects close to 56% of our sales participation. 'Hence, our house brand plays a very critical role,' she explained, adding that house brands bring in higher margins. Eco-Shop has 29 house brands as of today. On top of its public offering, Eco-Shop will offer 675.37 million shares to institutional investors at a price to be determined through a book-building process – of which 10 investors were identified as cornerstone investors who collectively subscribed for 90.91 million shares or 90.31% of the institutional offering. The cornerstone investors include Aham Asset Management, Albizia Capital Pte Ltd, Areca Capital Sdn Bhd, Eastspring Investments Bhd, Kairous Equity Sdn Bhd, Kenanga Investors Bhd, Kenanga Islamic Investors Bhd, Lion Global Investors Ltd, RHB Asset Management Sdn Bhd and RHB Islamic International Asset Management Bhd. An offer for sale of up to 515.15 million existing shares was also made available. Applications for the IPO are now open and will close on May 7, 2025 at 5pm.
The Star
29-04-2025
- Business
- The Star
Eco-Shop aims to raise RM419.87mil from Main Market IPO
KUALA LUMPUR: Eco-Shop Marketing Bhd is expecting to raise RM419.87mil from the public issue of 347 million new shares, en route to its listing on the Main Market of Bursa Malaysia. The dollar store retailer, in conjunction with the launch of its initial public offering (IPO) prospectus, unveiled plans to allocate RM56.27mil (13.4%) of the IPO proceeds to the expansion of its retail footprint nationwide, and another RM200mil (47.6%) to expand its distribution centres. Another RM10.9mil will be invested in information technology hardware and software. Of the remainder, RM100mil (23.8%) will be used to repay bank borrowings and RM52.7mil (12.6%) for working capital purposes and to defray the cost of the IPO and listing. Eco-Shop CEO and executive director Jessica Ng said the company is well-positioned to grow in scale and relevence in the value retail space, which she projects to have immense growth potential. "This mission is not just business; it is about making a meaningful impact in the lives our customers and the communities we serve," she said at the prospectus launch ceremony. Eco-Shop's IPO is the largest to be launched in Malaysia over the past eight months. It comprises a total offering of 862.15 million shares. Of these, 675.37 million will be offered to institutional and selected investors, including Bumiputera investors approved by the Ministry of Investment, Trade and Industry (Miti), at an institutional price to be determined by way of bookbuilding. A further 186.78 million shares will be made available to retail investors at a retail price of RM1.21 per share. Eco-Shop's market capitalisation upon listing is expected to be about RM7bil. According to the company, the joint bookrunners have secured 10 cornerstone investors who collectively subscribed for 90.81 milion shares or 90.31% of the institutional offering (excluding the Bumiputera portion under Miti). The cornerstone investors are AHAM Asset Management Bhd, Albizia Capital Pte Ltd, Areca Capital Sdn Bhd, Eastspring Investments Berhad, Kairous Equity Sdn Bhd, Kenanga Investors Bhd, Kenanga Islamic Investors Bhd, Lion Global Investors Ltd, RHB Asset Management Sdn Bhd and RHB Islamic International Asset Management Bhd. Maybank Investment Bank Bhd is the principal adviser, joint global coordinator, joint bookrunner, and sole underwriter for the IPO. UBS Securities Malaysia Sdn Bhd and UBS AG, Singapore Branch serve as joint global coordinator and joint bookrunner, while RHB Investment Bank Bhd also acts as a joint bookrunner.
