In the longer term, Pappajack’s business expansion plans are premised on the setting up and opening of new pawnbroking businesses and/or acquiring 3rd party pawnbroking outlets to widen its coverage and increase its market reach, TA Research said in a report.
It said that the group plans to raise additional funds from bank borrowings and/or the capital market to finance its business expansion when required.
The stockbroking firm said that Pappajack plans to expand the network of pawnbroking outlets from 25 currently. The group plans to open another 5 new pawnbroking outlets in the next 3-6 months, in new geographical markets within Peninsular Malaysia. “By expanding the network, Pappajack hopes to increase its market presence and serve a wider customer base,” the stockbroking firm said.
On some of the key competitive advantages of Pappajack, TA said that Pappajack’s short-term microloans provide borrowers with alternative financing options, particularly those who are financially unserved or underserved and want immediate finances.
The stockbroking firm said that Pappajack’s pawnbroking firm encourages ethical lending because all pawn loans are collateralised by pledges such as gold and luxury watches and the loan amount granted to the customers is determined by the current market value of the pledges.
On the employees at the various outlets, TA said that the new outlet employees will be expected to undergo an internal training programme to master the foundations of the pawnbroking process, which includes pledge assessment techniques as well as price valuation for pledges.
Furthermore, because of years of expertise in their respective disciplines, it said that the main management team possesses in-depth knowledge and competencies. They take an active and hands-on role in spearheading their respective departments to promote the group’s growth
The IPO entails a public issue of 167,000,000 new ordinary shares at an IPO price of RM0.30/share. The proceeds of RM50.1mn is to be raised which will be use for the expansion of outlets, cash capital for existing 20 pawnbroking outlets and listing expenses.