KUALA LUMPUR (June 7): MST Golf Group Bhd, the country's largest chain of golf specialty retailers formerly known as MST Golf (Asia) Sdn Bhd, has signed an underwriting agreement with RHB Investment Bank Bhd pursuant to its initial public offering (IPO) and intended listing on the Main Market of Bursa Malaysia.
In a statement on Wednesday (June 7), MST Golf said the IPO would entail the issue of 228 million ordinary shares in the company, comprising a public issue of 160 million new shares, and an offer for sale of up to 68 million existing shares.
The existing shares involve the institutional offering of up to 178.6 million IPO shares to identified institutional and selected investors, including Bumiputera investors approved by the Ministry of Investment, Trade and Industry.
It will also involve a retail offering of 49.4 million issue shares to the Malaysian public and the company's independent non-executive directors, eligible employees, its subsidiaries as well as persons who have contributed to the success of the company.
RHB Investment Bank will underwrite the 41.5 million shares made available for the Malaysian public under the retail offering tranche.
MST Golf received approval from the Securities Commission Malaysia to list on the Main Market on April 18. Barring any unforeseen circumstances, the company is expected to launch its prospectus by the end of June.
MST Golf executive director and group chief executive officer Ng Yap said that the underwriting agreement marks a significant milestone for the company, ahead of its listing on the Main Market.
“Since we began operations, we have expanded our presence from being solely in the Malaysian market into the wider Southeast Asian markets.
“We have a sound business model that has withstood the challenges of the Covid-19 pandemic, as we recorded a compound annual growth rate of 8.3% for our revenue between 2019 and 2021, with a resilient gross profit margin of approximately 40% during the same period,” said Ng.
MST Golf owns and operates 42 retail outlets comprising 35 outlets in Malaysia and seven outlets in Singapore, where it offers one-stop retail that specialises in providing high-quality golfing equipment comprising golf clubs, golf balls and accessories, and golf apparel from an extensive range of brands.
In the wholesale and brand distributorship business, MST Golf serves clients mainly in Indonesia.
“With our retail footprint spanning across Malaysia and Singapore, our IPO will help us accelerate our retail penetration in other golf markets in Southeast Asia, starting with Indonesia, Thailand and then Vietnam," he said.
Meanwhile, the company's upcoming proposed joint venture with PT Sinar Eka Selaras is expected to pave the way for MST Golf's regional expansion drive of its retail and online businesses in Indonesia.
PT Sinar Eka is a subsidiary of PT Erajaya Swasembada Tbk, a public company listed on the Indonesia Stock Exchange, and is involved in the distribution and trading of telecommunications equipment, computers, and other electronic devices. PT Erajaya is also involved in the distribution and retailing of sportswear.
RHB Investment Bank managing director and CEO Ganesh Sabaratnam said that MST Golf had continuously demonstrated commendable business resilience and delivered solid financial performances, especially in recent years.
"We at RHB Investment Bank are honoured to be given this opportunity to play a key role in the company’s next-level growth, so that it can continue to champion the game in Southeast Asia.”
RHB Investment Bank is the principal adviser, sole underwriter, and sole placement agent for MST Golf's IPO exercise.
MST Golf seeks Main Market listing