MST Golf executive director and group chief executive officer (CEO) Ng Yap—LOW LAY PHON/The Star
JAKARTA: MST Golf Bhd aims to reach a total of 61 retail outlets by the end of 2024, with regional expansion underway as planned during its initial public offering.
The golf retailer, which went public on July 20, 2023, has been expanding its footprint steadily.
It has recently opened its first store in Indonesia and is operating a total of 49 retail outlets, with 40 in Malaysia, eight in Singapore and one Indonesia.
MST Golf executive director and group chief executive officer Ng Yap said the group’s first store in Jakarta, Indonesia, spanning 17,000 sq ft, is the beginning of its regional expansion plan.
“It is timely for the group to tap into the Indonesian market, given that it is the largest economy in South-East Asia and the fourth-largest population in the world,” Ng told the media during the ribbon cutting ceremony of MST Golf’s inaugural retail outlet in the republic last week.
Ng said sales since the soft opening of its first store in Indonesia over the past two weeks have been encouraging.
In terms of market size, its contribution could surpass some other countries, he added.
The group planned to open five additional stores in Jakarta by the end of this year, bringing the total number of stores in Indonesia to six.
The Indonesian store outlets will be managed by PT MST Golf Indonesia, a 51:49 joint venture (JV) between MST Golf and Indonesian-listed PT Sinar Eka Selaras Tbk, also known as Erajaya Active Lifestyle.
Additionally, Ng said the group planned to enter the Thailand market by the end of this year.
Similar to the Indonesian market, he said the group is seeking a strong JV partner and is in the midst of finalising it.
“For Thailand, we will try to open two stores as planned and we are still in discussion with our future JV partners. In fact, I’m going to Bangkok in another month to follow up on the JV,” Ng said.
Ng explained that the reason for a JV partnership in each country is not for money, but rather, to mitigate risks.
“These JVs could assist us in handling aspects that, if we were to learn on our own, would take a considerable amount of time.
“These include understanding the culture of a country and from a business sense, managing importation, logistics and distribution, location sourcing, and dealing with local human resources,” Ng said.
Despite having expansion plans abroad, the group is also looking to grow in its current markets, Malaysia and Singapore, from the current 48 stores to 53 stores by the end of 2024, which includes the planned addition of four new stores in Malaysia and one in Singapore.
In terms of profit margins, as the group accelerates its regional expansion, Ng highlighted the necessity to be vigilant about costs.
The two primary expenses are staff and rental.
Ng highlighted the group’s strong emphasis on digitisation to reduce dependence on additional staff, ultimately enhancing productivity and efficiency.
Speaking specifically about Indonesia, Ng said that the rental costs are higher than those in Malaysia, while manpower appears to be more affordable.
“We plan to reduce the size of the store in Indonesia compared with Malaysia so that we are not overexposed to rental,” he added.To note, MST Golf has allocated about 90% of the RM129.6mil raised from its IPO to facilitate the group’s expansion plan.
A significant portion of its IPO proceeds, amounting to RM53.55mil, has been earmarked for venturing into new geographical markets, while the largest chunk of the funds, totalling RM62.76mil, is dedicated to fueling the company’s expansion efforts in Malaysia and Singapore.
Looking further ahead, the group also plans to establish a presence in Vietnam by 2025.
The group has ambitious plans to expand its total stores to 74 by the end of 2025 and to 83 by the end of 2026, with growth anticipated across all its markets.
