As at 12.29pm, its share price stood at 78 sen, 3 sen or 3.7% lower than the reference price. It was among the five most-traded counters with over 56 million shares exchanging hands.
The group expects to reach a market capitalisation of RM664.9 million upon its listing based on an enlarged share capital of 820.87 million shares.
This valuation reflects a price-earnings ratio (PER) of 27 times, which is based on its earnings per share of 3 sen in the financial year ended Dec 31, 2022 (FY2022).
At 78 sen, MST Golf’s market capitalisation currently stands at RM640.28 million.
The golf equipment retail chain operator hopes to generate RM129.6 million through the public issuance of new shares.
The majority of these funds are earmarked for facilitating the company’s expansion efforts both within the local market and regionally.
Confident amid fairway fumble
Despite the slightly disappointing debut, analysts remain optimistic of the group’s outlook.
TA Securities Research has valued the group at RM1.20 per share based on its remarkable 40% return on equity (ROE) in FY2022, outperforming Mr DIY’s 36.6% ROE.
On the other hand, Apex Securities has established a target price of 97 sen for MST Golf, equivalent to a PER of 21.9 times the company’s estimated earnings per share (EPS) of 4.4 sen for FY2024.
Regarding the group’s expansion plans, executive director and group CEO Ng Yap told The Edge in an interview that MST Golf intends to launch 19 new outlets in Indonesia within the coming three years.
Apart from that, MST Golf aims to address the underserved Malaysian market by establishing 10 new outlets, including five featuring indoor golf centres, in Malaysia and Singapore over the next three years.
The group is also planning to penetrate the Thai market next year, and the Vietnamese market in 2025.
During the launch of its prospectus, the group outlined its strategic allocation of IPO proceeds, with RM62.76 million designated for the expansion efforts in Malaysia and Singapore, and an additional RM53.55 million earmarked for venturing into new geographical markets.
RM3 million is to be allocated for the enhancement of digital technology facilities, RM3.23 million for bolstering working capital, and the remaining RM7.04 million will cover listing expenses.
Following its listing, MST Golf has committed to implementing a dividend policy that entails distributing 30% of its earnings to its shareholders.
For its first quarter ended March 31, 2023 (Q1 FY2023), the group posted a net profit of RM8.79 million, on a revenue of RM86.29 million.
RHB Investment Bank Bhd is the principal adviser, sole underwriter and sole placement agent for the IPO exercise.