Malaysian retailer Senheng targets doubling market share by 2025

[KUALA LUMPUR] Malaysia's biggest electronics retailer Senheng New Retail, which is set for a debut this month on the local exchange, is aiming to double its market share by 2025 as it expands its brick-and-mortar and virtual stores.

In an interview Wednesday (Jan 5) before the Jan 25 listing, chairman Lim Kim Heng said that his target is to capture 30 per cent of the domestic market in 3 years, compared with 13 per cent in 2020.

Senheng is planning to raise RM267.5 million (S$86.4 million) at an offer price of RM1.07 per share, valuing the company at RM1.6 billion.

Demand for electrical and electronics goods is recovering after suffering a blow in 2020 after the pandemic dented spending in the South-east Asian nation. The local trade clocked an average monthly retail sales of RM4.9 billion in the 9-month period ended September, up 7 per cent from a year earlier, according to market researcher Smith Zander.

The numbers are likely to improve further, helped by a rebound in the economy and tax breaks on products including laptops and tablets, the researcher said in a report.

Shares of Mr DIY Group, Malaysia's biggest home-improvement retailer, have more than doubled since their debut in October 2020, on investor demand for consumer-oriented businesses.

Chairman Lim said he's also aiming to double the market value of the company to about RM3 billion by 2025. TA Securities pegged a target share price of RM1.21 for Senheng New Retail without a rating. That is 13 per cent higher than its IPO price.

Already operating 105 outlets across the country, the company plans to use more than half the IPO proceeds to upgrade or open 61 stores through 2024.

The company's profit rose 21 per cent to RM34 million in the 9 months ended Sep 30 from a year ago, fuelled by higher sales from its bigger stores.

BLOOMBERG