PETALING JAYA: Senheng New Retail Bhd today launched the prospectus ahead of its listing on Bursa Malaysia’s Main Market involving the public issuance of 250 million shares and an offer-for-sale of 139.5 million existing shares at an issue price of RM1.07 per share to raise an estimated RM267.5 million.
A total of 60% or RM160.5 million of the proceeds will be utilised on setting up new SenQ and Senheng stores, upgrading existing stores into bigger and enhanced concept stores.
The group aims to upgrade or set up 61 new and existing stores from 2022 to 2024 to elevate the shopping experience of its customers. Another 19.3% or RM51.7 million will be used to strengthen the group’s back-end capacities and capabilities.
“It includes the development of new brand distribution business, expanding and upgrading the warehouse and logistics network, and boosting the digital infrastructure. The remaining 20.7% or RM55.3 million will be utilised to repay bank borrowings and defray listing expenses,“ it said in a statement.
Senheng New Retail executive chairman Lim Kim Heng said the group reinvented its strategy after a week of on-site learning with experts from Alibaba Group in Hangzhou, China.
“Our traffic and sales dropped in 2014, 2015, and 2016. We had no solutions to overcome it. Our customers shifted to online shopping platforms. I was inspired by (Alibaba co-founder) Jack Ma’s seminar that I watched in October 2016 where he said the pure online retail wave is over, the next 20 to 30 years will be a new retail era. Then, we were badly affected by the online marketplace in Malaysia.
“We called Alibaba Group in Hangzhou, China to learn from Jack Ma about new retail. I brought 26 top managers from the Senheng group and stayed in China for a week to learn new retail. We brought back the solutions and localised them and then fine-tuned them for Senheng’s business model. In 2017, within a couple of months after the new retail was launched, traffic returned, sales jumped, and our business grew 7%. In 2018, we achieved 26% year-on-year (YoY) growth. The power of new retail is not mastered by many Malaysian retailers and we are confident to achieve better financial results in 2022,“ Lim told reporters at the virtual prospectus launch today.
Lim said the group targeted dividend payouts of at least 30% of the net profit attributable to shareholders.
“Our customers are increasingly purchasing from our online platforms due to the additional convenience, while our physical retail stores serve as experiential centres for customers to get up close with the brands and products of their liking. We aim to be the territory champion within every 5km radius of our stores, with the largest floor space and variety of products.
“We will enhance our in-store shopping experiences and upgrade our operational capabilities to continue providing the best of seamless retail experiences to all our customers,“ he said.
Of the 250 million new shares, 149.5 million shares will be placed out to institutional and selected investors, and 48 million shares will be placed out to bumiputra investors approved by the Ministry of International Trade and Industry (Miti).
Another 22.5 million shares will be made available for application by eligible directors, employees, and persons who have contributed to the group’s success. The remaining 30 million new shares will be made available for application by the Malaysian public via balloting.
Meanwhile, 139.5 million offer-for-sale shares will be placed out to bumiputra investors approved by Miti.
Applications for Senheng’s IPO will close on Jan 10, 2022. Senheng is expected to list on the Main Market of Bursa Malaysia on Jan 25, 2022.
Based on an issue price of RM1.07 per share, Senheng will have a market capitalisation of RM1.6 billion upon listing.
