Monday 22 Apr 2024
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KUALA LUMPUR (Dec 29): Bursa Malaysia Main Market-bound Senheng New Retail Bhd seeks to strengthen its market share in home appliances to 30% by 2025 from the current 13% on the back of its upcoming initial public offering (IPO) next month.

Senheng executive chairman Lim Kim Heng said the group is planning to upgrade and open 61 stores in total from 2022 to 2024, and aims to be the “territory champion” within every five-kilometre radius of its stores, with the largest floor space and variety of products. 

“We are now in every state in Malaysia but still there are quite a number of towns that we are not having a presence in yet. 

“We need to move a bit aggressively and with the IPO proceeds coming in, this will boost ourselves towards achieving our dreams,” he said at a press conference following Senheng’s virtual initial public offering (IPO) prospectus launch on Wednesday (Dec 29).

Senheng earlier announced its plans to raise RM267.5 million in new proceeds from its IPO on the Main Market of Bursa Malaysia to fund its next transformation phase and shape the nation’s new retail landscape. 

Of the proceeds to be raised from the public issue, Senheng said 60% or RM160.5 million will go towards setting up new stores as well as upgrading existing stores into bigger, enhanced concept stores.

The consumer electrical and electronics retailer’s IPO exercise entails the public issue of 250 million new shares and an offer for sale of 139.5 million existing shares at an issue price of RM1.07 per share.

Based on the issue price of RM1.07 per share, Senheng will achieve a market capitalisation of RM1.6 billion upon listing on the Main Market on Jan 25, 2022. Applications for Senheng’s IPO are open from Wednesday and will close on Jan 10, 2022.

Lim highlighted that the group’s customers are increasingly purchasing from its online platforms due to the additional convenience, while its physical retail stores serve as experiential centres for customers to get up close with the brands and products of their liking. 

“We will enhance our in-store shopping experiences and upgrade our operational capabilities to continue providing the best of seamless retail experiences to all our customers.

“These investments will not only extend our strong growth seen over the years, but also propel us to higher ground as we head into the next phase of our transformation journey,” he said. 

According to Lim, Senheng has embarked on multiple transformations since its inception, including its digital transformation in 2015 to improve operational efficiencies and customer experiences. The group’s latest transition into the new retail model in 2017 also integrated its physical stores and back-end functions to its online platforms and Senheng App.

In addition, he said the group’s commitment to continuous innovation has contributed to its success, with annual revenue consistently exceeding RM1 billion from the financial year ended Dec 31, 2018 (FY18) to FY20.

He also noted that despite store operation disruptions due to Covid-19-induced lockdowns, Senheng achieved RM1.3 billion in revenue in FY20, growing 13.1% from RM1.1 billion in the previous corresponding year (FY19). 

This comes as the group upgraded stores by increasing floor space and offering larger product variety, and leveraged its PlusOne loyalty programme, digital marketing and personalised telemarketing initiatives to continue serving its customers, said Lim.

“Going forward, we are targeting dividend payouts of at least 30% of the net profit attributable to shareholders, to reward our shareholders for their confidence in Senheng.

“So far, we have no intention to go into the regional base. We want to stay focused in the country and we foresee there is still big room for us to grow over here,” Lim added.

Edited ByLam Jian Wyn
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