Kim Hin Joo slumps on ACE Market debut, shares oversubscribed by 7.7 times

Through its partnership with The Entertainer, the group aims to open and operate 3 to 4 toy outlets within 3 years of its listing


KIM Hin Joo (M) Bhd made a weak debut on Bursa Malaysia’s ACE Market yesterday, opening at 39 sen or four sen below its offer price of 43 sen a share, before closing 18% or eight sen lower at 35 sen on its maiden trading day.

The retail and distributor of baby, children and maternity products was the 16th listing for the year and fifth on the ACE Market.

“Our gross proceeds from the listing, amounting to RM32.68 million, will be mainly used for business expansion, capital expenditure and working capital purposes.

“Our business plans involve the expansion of our existing Mothercare and Early Learning Centre (ELC) retail network, as well as the opening of UK-based toy retailer The Entertainer,” Kim Hin Joo chairman Pang Kim Hin said during the listing ceremony of the group in Kuala Lumpur yesterday.

Through its partnership with The Entertainer, the group aims to open and operate three to four toy outlets within three years of its listing, with the first branch to be opened by the first quarter of next year (1Q20) in the Klang Valley.

The Entertainer was founded in 1981 and currently runs a chain of toy shops in the UK with a total of 148 stores.

Kim Hin Joo intends to revamp its information technology (IT) infrastructure system and e-commerce platform.

It has earmarked RM3 million from its fundraising to replace its back-end IT infrastructure system, which would streamline its business process of retail management, resource planning and management.

“Our business depends on the birth rate, that’s the key factor for us,” Kim Hin Joo MD Pang Shu Ming (picture) told reporters.

According to the Department of Statistics Malaysia, 116,850 live births were recorded in 1Q19, a decrease of 0.2% year-on-year.

To date, the group has 17 Mothercare outlets, 11 ELC store-in-stores, and online sales channels where it sells a total of 184 brands of clothing, home and travel products, and toys.

Kim Hin Joo’s listing was done through the issuance of 76 million new shares, comprising 20% of the group’s enlarged issued share capital.

Some 19 million shares will be made available to the Malaysian public, 10 million to eligible persons and 47 million to selected investors.

Following the corporate exercise, Kim Hin International Pte Ltd holds a 62% stake in the group, while Datuk Pang Leong Hoon holds 3%, followed by its non-independent chairman Kim Hin with 0.3%.

Kim Hin Joo’s offering of 19 million shares to the public was oversubscribed by 7.67 times.