KUALA LUMPUR (July 20): Newly listed MST Golf Group Bhd said it is optimistic on its financial outlook on the back of sustainable demand persisting after the golf boom caused by the Covid-19 pandemic, as well as a lack of competition in quality retail golf merchandise.
During a press conference on Thursday (July 20) following its listing ceremony, the group shared that they are upbeat about the golf market, sustained by growing golf activity owing to the influx of the younger generation picking up the sport.
MST Golf executive director and group chief executive officer Ng Yap commented that in comparison to other sports, golf is the hardest to attract players to play. Thus, with the growing number of younger players, the group is hopeful for the company’s longevity, citing another foreseeable 50 years after the older generation phases out.
Ng said that golf activity is tracked through people purchasing beginner packet golf sets, golf balls and gloves. Though buying activity for beginner golf sets has decreased compared to the Covid-19 times, buying activity for golf balls and gloves are still active.
Besides the positive demand, MST Golf believes that its positioning within the market is “far ahead” of local competitors.
“The only thing [that] comes close to us is Thailand and Singapore for that matter, in department stores, namely Takashimaya and Isetan. Typically, golf stores are about 1,500 square feet (sq ft) shoplots; how to compete with us (who have) 10,000 sq ft? There is no comparison and it is difficult to compete,” said Ng.
The retail golf merchandise provider further shared that the golf market is underserved and that there is a lack of golf retail shops accessible to serve golfers. Therefore, it believes that the market size can be expanded with much space to grow.
This is supplemented by the group’s expansion plans to break into the Southeast-Asian region, mainly Indonesia, Thailand and Vietnam, while strengthening its footprint in Singapore.
“We don’t intend to get into other sports at all; there is enough within the golf industry for us to grow,” Ng said.
When questioned on the group’s outlook concerning the impact of technological advancements, particularly artificial intelligence (AI), Ng said the group is looking forward to technology’s impact on golfing, especially indoor golf centres, though he attributes the influence to impact “more on the manufacturing side”.
Ng sees technology as benefiting the golf industry, as it lowers the entry barriers and costs for beginners and widens players’ connectivity to other players worldwide in real-time.
“In fact, in the US, off-course players are catching up more than on-course players now, simply because there are a lot of younger players coming in. So, that kind of lowers the barrier entry; that’s what we try to do as well — create more indoor golf centres,” Ng commented.
Following the listing exercise, the group aims to utilise 90% of the raised funds to prioritise their expansion plans, with an estimate of RM62.76 million for Malaysia and Singapore, with 13 branches in Malaysia and two in Singapore expected to unfold.
Meanwhile, another RM53.55 million is allocated for other geographical areas, with Indonesia being the group’s next target, given the memorandum of understanding signed with PT Sinar Eka Selaras that seeks to open 19 outlets in the next three years.
An additional RM3 million will be allocated for the upgrading of digital technology facilities, RM3.23 million for its working capital, and the remaining RM7.04 million for listing expenses.
At the time of writing on Thursday, MST Golf was trading at 78.5 sen, lower by 2.5 sen or 3.1% from its initial public offering price of 81 sen, valuing the group at RM644.4 million.