The furniture design and development company opened the trading day at 38 sen, climbing to second on Bursa Malaysia’s most actively traded shares list by noon, with 69.16 million shares changing hands.
Several research houses had expected Synergy to fare much better in its listing debut.
Mercury Securities said Synergy was “well-positioned” to leverage on the strong growth of global furniture consumption.
Its attractive expansion plans and strong design and development (D&D) capabilities had prompted Mercury to set a fair value of 52 sen.
Meanwhile, Apex Securities and TA Securities set a fair value of 50 sen and 45 sen respectively.
Of the last four IPOs, three have disappointed with Cloudpoint Technology Bhd being the only outlier, surging 97% on its debut. DXN Holdings Bhd and Radium Development Bhd both opened below their reference price, at 1.4% and 30%, respectively.
At 4.10pm, Synergy House remained at 36 sen, valuing the company at RM180 million.
In a press statement today, Synergy House chairman Mok Juan Chek said the listing will give the group funds for some of its immediate expansion plans.
“The listing will also enable the group to tap into the equity capital market for future fundraising, while also providing the financial flexibility to pursue growth opportunities as and when they arise, as the group expects demand for home furniture to continue growing,” he said.
Ahead of its listing today, the IPO was fully subscribed by 14.02 times by the Malaysian public.
Synergy was expected to raise RM34.4 million from the exercise, with proceeds used for purchasing inventories (29.07%), e-commerce fulfilment centres (4.36%), advertising and promotion (2.91%), repayment of borrowings (29.07%), working capital (22.38%) and listing expenses (12.21%). The exercise saw the issuance of 130 million new shares.
For the first quarter ended March 31, 2023, Synergy House posted a net profit of RM2.62 million on the back of a RM51.58 million revenue.
In its previous financial year (FY2022), the group’s profit after tax was RM16.6 million compared to RM14.4 million a year earlier, while revenue in FY2022 stood at RM194.1 million from RM184.3 million the previous year.