As ACE Market-bound HSS Holdings Bhd prepares to go public on June 23, Managing Director Goh Chen Chang is positioning the group’s IPO not as a culmination of its 20-year bakery journey, but as a strategic reset into a more scalable, automated and brand-driven growth platform.
In exclusive responses to BusinessToday, Goh said HSS has evolved from a traditional home-based bakery business into an integrated group spanning sourcing, trading and manufacturing.
Over time, this transformation has enabled the group to build a portfolio of around 6,500 SKUs while establishing long-standing relationships with wholesalers, distributors and retailers across Malaysia and selected export markets.
He said the key shift in recent years is the increasing diversification and scalability of the business, particularly the growing contribution from manufacturing.
“While sourcing remains the largest revenue driver, HSS has been steadily strengthening its in-house production capabilities, especially in cakes, setting the stage for its next phase of expansion,” he added.
IPO To Catalyst Scale And Transformation
HSS intends to raise RM13.5 million through its IPO exercise for capacity expansion, automation upgrades and working capital needs as it accelerates its transition into a more scalable manufacturing-led business.
The group’s IPO involves a public issue of 75 million new shares and an offer for sale of 52.5 million existing shares, priced at 18 sen per share.
Goh emphasised that the IPO is designed to accelerate this transition by funding capacity expansion, automation initiatives, brand-building activities and the implementation of an ERP system aimed at improving operational efficiency.
He described the listing as a milestone that will provide a stronger platform to capture long-term opportunities in both domestic and international markets, rather than an end goal.
Goh then highlighted that a central pillar of the IPO plan is a significant expansion in production capacity, where HSS will install an additional automated cake production line at Manufacturing Facility 2, which will double output from 480kg per hour to 960kg per hour while increasing daily production capacity from 4,560kg to 9,120kg.
“This upgrade will also allow the group to expand into new product categories, including muffins, which were previously constrained by capacity limitations,” he shared, adding that the group will also add a new biscuit production line and supporting machinery at Manufacturing Facility 1 to enhance automation and efficiency.
“Both upgrades are expected to be commissioned within 12 months of listing, reinforcing our shift toward higher in-house production capability and improved operational control,” he said.
Scaling Complexity Into Operational Strength
Goh said HSS’ extensive SKU range should be viewed as a strength rather than a complexity burden, as it allows the group to serve a wide spectrum of consumer needs and consumption occasions.
He explained to BusinessToday that the group avoids expanding its product portfolio indiscriminately, instead focusing on demand-driven offerings supported by a flexible model in which products can be manufactured internally, outsourced, or sourced from brand partners.
He added that the upcoming ERP system will further strengthen inventory management, production planning and operational visibility, allowing the business to manage scale more efficiently while reducing overlap and improving responsiveness to demand shifts.
On cost pressures, Goh said the bakery industry’s exposure to volatile raw material prices such as flour, sugar and dairy is unavoidable, but HSS has built resilience through supplier diversification and scale.
“A broad supplier network across local and overseas markets allows us to secure competitive pricing and reduce reliance on any single source, while larger purchase volumes improve bargaining power and economies of scale,” he said, adding that the group also maintains flexibility in pricing, with the ability to absorb or pass through cost increases where necessary, supported by its diversified product base and established customer relationships.
“To date, cost pressures have not materially impacted performance, though we continue to focus on sourcing discipline and pricing management to protect margins,” he said.
Building Brands, Strengthening Balance Sheet and Long-Term Returns
Goh highlighted that part of the IPO proceeds will also be used to partially repay bank borrowings linked to earlier property and headquarters acquisitions.
“This reflects the group’s commitment to maintaining a prudent financial position while entering its next stage of growth, although he stressed that the listing is equally focused on funding expansion and automation rather than deleveraging alone,” he said.
As for branding, Goh said HSS is pursuing a multi-brand strategy across SINAR, 合顺成饼家 and Sa1ko, with each brand targeting different consumer segments.
“Instead of prioritising a single flagship label, we are investing in strengthening visibility across our entire portfolio through digital marketing, influencer partnerships, live-stream commerce and e-commerce platforms such as Shopee and TikTok Shop.
“We believe this long-term goal will elevate these brands into trusted household names in Malaysia while expanding into new markets and customer segments, supported by continued product innovation and market development,” he shared.
He then revealed that currently HSS does not have any formal dividend policy, as the board prioritises reinvestment into manufacturing upgrades, automation, ERP implementation and brand development.
Thus, future dividend decisions, he said, will depend on financial performance, cash flow and capital requirements, balancing reinvestment needs with long-term shareholder returns.
Nevertheless, Goh said HSS’ competitive edge lies in its integrated business model, broad product portfolio and established distribution network, which together provide resilience and flexibility in a highly competitive bakery market.
With automation-driven capacity expansion, stronger operational systems and a push toward brand visibility, HSS is positioning its IPO as the foundation for its evolution from a traditional bakery operator into a scalable FMCG-style growth platform built for its next phase of expansion.
