Main market bound household electrical chain, Senheng has received a resounding response from investors as its Initial Public Offering for the public portion has been oversubscribed by 10.4 times.
The IPO received a total of 16,548 applications for 343.2 million shares with an aggregate value of RM367.3 million, for the public portion comprising 30.0 million shares constituting 10x over the available shares.
Senheng is expected to list on the Main Market of Bursa Malaysia on 25 January 2022, and is slated to be the first Main Market listing for the year. Chairman Lim Kim Heng alluded to the fact the oversubscription was mainly due to the public confidence of its over 30-year track record.
Despite lockdowns and pandemic, due to high demand for electrical goods thegroup recorded a 21.2% jump in net profit to RM34.1 million for the nine months ended 30 September 2021 compared to RM28.1 million previously, on the back of 12.3% revenue growth to RM987.7 million in 9M21 from RM879.6 million in 9M20.
The IPO exercise entails the public issue of 250.0 million new shares and an offer-for-sale of 139.5 million existing shares at an issue price of RM1.07 per share.
Of the proceeds to be raised from the public issue, 60.0% or RM160.5 million will go towards setting up new stores as well as upgrading existing stores into bigger, enhanced concept stores. The Group aims to upgrade or set up 61 new and existing stores from 2022 to 2024 to elevate the shopping experience of its customers.
Another 19.3% or RM51.7 million will be used to strengthen the Group’s back-end capacities and capabilities. This includes developing new brand distribution business, expanding and upgrading the warehouse and logistics network, and boosting the Group’s digital infrastructure.
The remaining 20.7% or RM55.3 million will be utilised to repay bank borrowings and defray listing expenses.
Mercury Securities Sdn Bhd is the principal adviser, managing underwriter, joint underwriter, and joint bookrunner for the IPO exercise, while CIMB Investment Bank Berhad and AmInvestment Bank Berhad are the joint bookrunners and joint underwriters.
