KUALA LUMPUR (June 8): HSS Holdings Bhd, en route to the ACE Market, is already fairly valued at its proposed listing price, leaving no upside for investors, according to TA Securities.
At its initial public offering (IPO) price of 18 sen per share, the bakery products maker’s valuation is already in line with its peers at about 10 times their 2027 earnings, the research house said in an unrated note. Local rival SDS Group Bhd (KL:SDS) is trading at seven times its forward earnings.
“Our valuation is aligned with its global peers within industry,” TA Securities said.
Applications for HSS Holdings’ IPO shares will close on June 9, and listing has been scheduled for June 23. Upon listing, the company is expected to have a market capitalisation of RM90 million based on its IPO price.
Based in Johor, HSS Holdings markets a range of bakery products, including cookies, biscuits, cakes and snacks, under its own brands such as SINAR. The products are produced in-house, outsourced to third-party manufacturers and suppliers, or sourced directly from brand owners.
The company is unrelated to listed construction services firm HSS Engineers Bhd (KL:HSSEB). HSS Holdings has a network of 330 wholesalers, five distributors and 117 retailers across Malaysia, Singapore, Australia, and Indonesia.
HSS Holdings also does not have a formal dividend policy, and TA Securities is not projecting any distribution over the next three years.
“We do not anticipate any dividend payouts in the near term, as we believe the group will remain focused on deleveraging its balance sheet while continuing to invest in capital expenditure initiatives to support topline growth,” TA Securities noted.
Net profit could decline to RM7.9 million this year, according to TA Securities’ forecasts, from RM8.6 million in 2025 that included one-off disposal gains of about RM2 million from sale of assets. Revenue, meanwhile, is expected to grow 9.5% this year.