IPO Series - Eco-Shop Marketing Berhad 宜购百货 - The Largest Dollar Store in Malaysia - Better than DIY & 99?

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Figure 1: IPO timetable of Eco-Shop Marketing Berhad
-Will be listed on the MAIN market

Info of IPO
Enlarged no. of shares upon listing:  5747 million
IPO price: RM1.21
Market capitalization: RM6953.87 million
Estimated funds to raise from Public Issue:  RM419.87 million
PE ratio = 39.22x (based on FYE2024)
 

Figure 2: Business model of Eco-Shop Marketing Berhad
Source: Eco-Shop Marketing Berhad IPO prospectus

Figure 3: Utilization of proceeds of Eco-Shop Marketing Berhad
Source: Eco-Shop Marketing Berhad IPO prospectus

Dividend Policy
-The group targets a payout ratio of about 40% to 60% of the PAT
 

Figure 4: Major customers and suppliers of Eco-Shop Marketing Berhad in FYE2024
Source: Eco-Shop Marketing Berhad IPO prospectus
 

Figure 5: Profit & Loss Statement of Eco-Shop Marketing Berhad

Figure 6: Financial position of Eco-Shop Marketing Berhad

Figure 7: Market share estimation of Eco-Shop in FYE2024

Financial overview, industry market, and personal opinion
-Eco-shop has been reporting strong financial growth, with the PAT grew from RM26.96 million in FYE2022 to RM177.28 million in FYE2024, or a CAGR of 156.43%. It attributed to the continuous expansion of Eco stores across Malaysia and achieved 358 stores at LPD.
-Eco-shop is targeting to open another 70 new Eco-shop stores throughout Malaysia, where Peninsular consists of 60 stores while East Malaysia comprises 10 stores.
-It is anticipated to continue a double-digit growth rate in dollar store chain to the year of 2029, and Malaysia has not achieved the saturated stage as compared to other countries, like Canada, Japan, and the U.S.A based on the sales value per capita.  
 

By: Jshen Ng