Malaysian discount retail chain Eco-Shop Marketing Sdn Bhd has filed to raise 419 million ringgit ($96.7 million) via an initial public offering (IPO) on Bursa Malaysia. It will be the biggest debut in Malaysia in eight months, according to the company’s IPO prospectus released on Tuesday.
Eco-Shop will look to sell 347 million shares, or 6.04% of enlarged issue shares at 1.21 ringgit apiece in the public listing, valuing the company at 7 billion ringgit ($1.62 billion), according to the prospectus. The company plans to raise an additional 623 million ringgit ($144 million) via a share sale to institutional investors.
Maybank Investment Bank Bhd, a unit of Malaysia’s biggest lender, is the sole underwriter of the IPO.
The shareholdings of founder Lee Khar Watt and Agathis Montana (a vehicle of Creador IV) will be diluted to 73.9% and 1.9% after the IPO from 80.3% and 10%, respectively.
The stock is expected to start trading on May 23.
The dollar-store operator plans to use a part of the proceeds from the share sale to add 70 stores per year for the next five years, essentially doubling its store count, Chief Executive Officer Jessica Ng said during the launch of the prospectus in Malaysia’s Selangor state. The rest will be used for the centre expansion plans, investment in IT, and for working capital needs.
Eco-Shop’s profit before tax in Jan-November 2024 reached 127 million ringgit, up from 99.8 million ringgit in the same period of 2023. Its revenue during the period reached 1.36 billion ringgit, compared to 1.13 billion ringgit in Jan-Nov 2023.
Established in 2003 by Lee Kar Whatt, the majority of items on Eco-Shop sell for 2.60 ringgit. It operates 350 stores across Malaysia and has a market share of 68% in the country’s discount-store sector.
Eco-Shop’s IPO underlines the strength of Malaysia’s consumer sector following the country’s biggest listing last year by mini-mart chain 99 Speed Mart Retail Holdings Bhd. 99 Speed Mart raised over $530 million in Malaysia’s biggest IPO in seven years.
Malaysia’s consumer spending is expected to see further strong growth in 2025, Fitch Solutions’ BMI said in a recent report. Household spending is expected to grow 5.2% this year, according to the report, marking a return to pre-pandemic-level growth.
