Is this a bad sign for Senheng?
Shares of Senheng New Retail Bhd, a local electrical and electronics (EE) retailer, closed at 85.5 in Tuesday's trading session (January 25, 2022) representing a discount of 21.5 sen or 20.09% from the initial public offering (IPO) price of RM1.07.
During Tuesday’s trading session Senheng was the 2nd most actively traded stock on the local bourse with 163.55 million shares changing hands.
Its turnover is equivalent to 10.9% of the issued share capital of 1.5 billion.
During the morning trading session on Wednesday (January 26, 2022), Senheng traded actively at 87.5 sen.
The company's executive chairman, Lim Kim Heung, in an online media briefing said Senheng's plan to grab another 30% market share was not too difficult to achieve after the IPO as it had seen double-digit growth before Covid-19.
He added that the company has no plans to expand its company overseas but instead wants to focus exclusively on Malaysia with the goal of becoming a 'regional champion' within 5 kilometers of its branch.
Meanwhile, the retailer reported that its financial results for the 9 cumulative months ended September 30, 2021 there was an increase of 21.22% in net profit to RM34.05 million compared to RM28.09 million the previous year.
Ta Securities in its note stated with a target price of RM1.21 which represents a premium of 13.08% or 14 sen to the IPO price of RM1.07.
He added that the IPO price of RM1.07 will evaluate the EE retailer based on the remaining price-income ratio of 28.8 times based on the 2020 calendar year revenue.
