KUALA LUMPUR (July 17): Main Market-bound MST Golf Group Bhd, which is expected to be listed on July 20, posted a net profit of RM8.79 million for its first quarter ended March 31, 2023 (1QFY2023).
Its revenue stood at RM86.29 million, with its retail segment contributing RM61.59 million in the quarter, the golf equipment retail chain operator said in its filing on Monday (July 17).
MST Golf noted that no comparative figures for the preceding year are available, as this is the first interim financial statement announced by the company in compliance with Bursa’s listing requirements.
Other segments that contributed to its revenue include its wholesale segment, which brought in RM21.03 million, golf services (RM2.44 million) and indoor golf (RM1.23 million).
According to its prospectus, its profit after tax has increased to RM29.12 million in the financial year ended 2022 (FY2022) from RM10.22 million in FY2019. Revenue has also increased to RM300.88 million in FY2022 from RM175.95 million in FY2019.
Its executive director and group chief executive officer Ng Yap said the group remains optimistic of its post-Covid-19 prospects given the current state of golfing activities, including the growing landscape of corporate golf tournaments in the market.
“Our innovative 3-in-1 store concept, which combines our specialty store, golf academy and indoor golf facilities, offers a total golf retail experience for consumers and continues to capture the interest of malls,” said Ng in a statement on Monday.
“As we prepare for our upcoming listing on Bursa Securities, we are pleased to announce the successful opening of two new stores in Penang and Seremban this month, with a third store set to open in Shah Alam in August.”
Ng added that in line with its initial public offering (IPO), the group plans to expand its golf retail business and is eyeing the penetration of new geographical areas such as Indonesia, Thailand and Vietnam.
He noted that the group has inked a memorandum of understanding on April 18 with PT Sinar Eka Selaras, a subsidiary of major Indonesian retail player Erajaya Group, for a proposed joint venture in Indonesia.
“Progress towards our expansion into Indonesia via the proposed joint venture is on track.
“Given our strong business foundation in Malaysia and Singapore, coupled with our well-established business-to-consumer brand and support from the global brands, we are confident in successfully rolling out our business expansion plan for the next three years and beyond,” Ng said.
On June 28, MST Golf announced its IPO price at 81 sen per share and that it expects to have a market capitalisation of RM664.9 million, with an enlarged share capital of 820.87 million shares.
It valued that company at about 27 times its price-earnings ratio based on its net profit of RM26.65 million for the Dec 31, 2022 (FY2022) period.
From the exercise, the company expects to raise RM184.68 million, of which RM129.6 million will be from issuance of shares.
The bulk of the proceeds, RM129.6 million, will go towards funding its expansion in Malaysia and Singapore, as well as new geographical markets.
The Malaysian Issuing House Sdn Bhd, on behalf of the company, said the total demand for the group’s 228 million IPO shares, comprising 160 million public issue shares and 68 million shares offered for sale by existing shareholders, represents a subscription rate of 5.28 times.
It noted that the institutional offering of up to 178.6 million shares comprising 110.6 million issue shares and 68 million offer shares were subscribed by 6.39 times.
A total of 2,603 applications for 62.73 million issue shares with a value of RM50.81 million were received for the 41.5 million issued shares made available to the Malaysian public representing a subscription rate of 1.5 times.
RHB Investment Bank Bhd is the principal adviser, sole underwriter, and sole placement agent for the IPO exercise.