(From left) Kenanga Investment Bank acting head of corporate finance Alvin Ooi Yet Ming, head of group investment banking and Islamic banking Datuk Roslan Hj Tik, Synergy House independent non-executive chairman Mok Juan Chek, Tan Eu Tah and Teh Yee Luen
KUALA LUMPUR: Synergy House Bhd
aims to raise RM34.4mil from its initial public offering (IPO), ahead of its listing on the ACE Market of Bursa Malaysia on June 1, 2023.
The IPO will comprise the issuance of 130 million new shares, including a public issue of 80 million new shares, at an IPO price of 43 sen per share.
At the launch of its IPO prospectus, the cross-border e-commerce seller and furniture exporter of ready-to-assemble home furniture said RM10mil or 29.07% of the proceeds will go towards the purchasing of inventories for its proposed e-commerce fulfilment centre in Johor.
A further RM1.5mil or 4.36% will go towards purchasing a racking system and forklifts for the centre and RM1mil or 2.91% will be utilised for e-commerce advertisements and promotions.
Of the remaining amount, RM10mil (29.07%) will be used to repay borrowings, RM7.7mil (22.38%) will go towards workig capital and RM4.2mil (12.21%) for listing expenses.
Executive director Tan Eu Tah said the IPO will fund its future growth as global demand for furniture e-commerce is expected to continue to grow.
"The recognition gained through our listing status will also enhance our reputation in the marketing of our products and services, retention of employees, expansion of customer base as well as attract new employees,” he said in statement.
Executive director Teh Yee Luen added that leveraging on e-commerce has been transformative for the group as it enabled it to have direct contact with end-consumer to gather firsthand information and insights on consume preferences for product development.
"We intend to continue to grow our business-to-consumer (B2C) segment by utilising a portion of the IPO proceeds to purchase inventories for our B2C segment and by carrying out advertising and promotion initiatives on third-party e-commerce platforms.
"We also plan to grow our B2C sales through expanding to more e-commerce platforms in new markets,” he said.
For the 2019-2022 financial years, the group registered revenue of RM111.5mil, RM122.9mil, RM184.3mil and RM194.1mil respectively.
In particular, the group has seen encouraging growth from its B2C segment with sales increasing from RM1.99mil in FY2019 to RM49.63mil in FY22 at a compound annual growth rate of 192.17%.
Kenanga Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
