EMPG Group Berhad

Prospectus Date: [●]

EMPG Group Berhad IPO: Comprehensive Investor Analysis, Deep-Dive Financials, Risk Factors & Market Outlook

IPO Snapshot: EMPG Group Berhad Listing on ACE Market

EMPG Group Berhad is launching its Initial Public Offering (IPO) on the ACE Market of Bursa Malaysia Securities Berhad, offering a strategic opportunity for investors seeking exposure to an established player in the retail and apparel sector. This comprehensive review provides investors, analysts, and market watchers with every essential detail from the prospectus, including offer structure, financial health, competitive strengths, growth trajectory, and the risk landscape.

• IPO Symbol: Not disclosed
• Offer Price: RM[●] per share
• Total Offer Size: 170,100,000 shares
• Public Issue: 121,600,000 new shares (20.07% of post-IPO share capital)
• Offer for Sale: 48,500,000 existing shares (8.00% of post-IPO share capital)
• Post-IPO Outstanding Shares: 606,000,002
• Market Capitalisation Upon Listing: RM[●]

No minimum subscription amount required; listing is contingent on meeting the public shareholding spread: at least 25% of shares held by a minimum of 200 public shareholders (holding at least 100 shares each) at listing [[43]].

Use of Proceeds: Strategic Growth and Working Capital

All proceeds from the Public Issue (RM[●] million) will be channeled towards:

• Expansion of retail network (timeline: within 24 months)
• Working capital (timeline: within 24 months)
• Estimated listing expenses (settled within 1 month)

This use of proceeds signals a growth-driven strategy, focused on network expansion and supporting increased sales volume. All proceeds from the Offer for Sale will accrue entirely to the selling shareholders [[28]].

Placement Structure and Investor Participation

Allocation is broad-based, designed to ensure liquidity and regulatory compliance:

• Malaysian Public (5.00%): 50% reserved for Bumiputera investors
• Eligible Persons (0.71%): Directors and employees via Pink Form
• Private Placement (14.36%): Bumiputera investors approved by MITI and selected institutional investors
• Offer for Sale (8.00%): Existing shares to selected investors

Clawback & Reallocation: Unsubscribed shares in each tranche are reallocated to other categories or underwritten, ensuring full subscription [[42]].

No overallotment or price stabilization (greenshoe) mechanism will be employed. This may result in higher listing day volatility [[43]].

Deal Parties and Structure

• Principal Adviser, Sponsor, Underwriter, Placement Agent: Berjaya Securities Sdn Bhd (formerly Inter-Pacific Securities Sdn Bhd)
• Corporate Finance Adviser: WYNCORP Advisory Sdn Bhd
• Issuing House: Malaysian Issuing House Sdn Bhd
• Share Registrar: Boardroom Share Registrars Sdn Bhd

Underwriting: 34,601,000 Public Issue Shares (Malaysian Public + Eligible Persons) are underwritten by Berjaya Securities Sdn Bhd. Private placement tranches are not underwritten [[51]].

Brokerage Fee: 1.00% for successful Malaysian Public applications [[50]].

Placement Fee & Underwriting Commission: Paid to Placement Agent and Underwriter, rates undisclosed.

Assessment: With a reputable domestic investment bank underwriting and placing the issue, as well as a wide public allocation, the deal structure supports a robust listing, subject to demand.

Company Overview: Business Model, Market & Strengths

Business Model: EMPG Group Berhad is a retail-focused company operating a nationwide network of retail points, including consignment counters, standalone outlets, and a presence on major e-commerce platforms (Shopee, Lazada, TikTok). The company markets both in-house and third-party branded apparel, including school attire, Muslimah wear, innerwear, and nightwear [[47]].

• Revenue Streams: Product sales through physical retail and e-commerce
• Key Customer Segments: Malaysian consumers, with a focus on major cities and towns
• Principal Markets: Malaysia (no international operations stated)

Industry Definition: Apparel retailing, focused on school attire, traditional wear, and branded fashion.

Competitive Advantages:

• Extensive retail network and department store partnerships
• Strong portfolio of in-house and licensed brands (e.g., Pierre Cardin, Hummer)
• Proven track record of profitability and cash generation
• Experienced management team and founders with long-standing sector expertise

Brand Strength & Market Position: EMPG has proprietary rights to brands and licenses, and is positioned as a leading player in school and Muslimah apparel retail.

Financial Health: Multi-Year Performance & Key Metrics

Profitability is healthy with rising gross profit and margins, though revenue has modestly declined. The company remains net profitable with healthy cash balances, and borrowings are moderate relative to equity [[34],[281]].

Management Team and Leadership

• Promoters & Key Shareholders: Dato’ Lee (Deputy Chairman), Mr. Loh (Managing Director)
• Other Key Senior Management: Tan Jiong Hao (Group Financial Controller), Yap Ee Na (Group HR Manager), Lim Chin Lee (Director & Operations Director, Pasaraya MU), among others

Leadership has deep sector experience and significant equity stakes, aligning interests with public shareholders post-listing. Promoters will collectively hold 55.80% post-IPO [[271]].

Trends, Timing & Market Environment

Sector Trends: The company operates in a resilient segment, supplying school attire and Muslimah wear, which are considered essentials. Retail expansion and e-commerce growth are key demand drivers.

Seasonality: The business experiences typical retail cycles, with peaks during school opening and festive seasons [[114]].

IPO Timing: Application period and listing dates are undisclosed. Any changes will be announced via Bursa Malaysia and major newspapers [[5],[37]].

Environment: The prospectus highlights no material adverse sector or macroeconomic changes affecting operations as at the latest practicable date [[345]].

Risk Factors: Quantified Exposures and Key Issues

• Business Risks: Supplier and customer concentration, supply chain disruptions, regulatory changes, and consumer preference shifts [[241]].
• Financial Risks: Modest revenue decline and fluctuating net profit; exposure to cost inflation and interest rates [[281]].
• IPO/Share Risks: Promoters retain control post-IPO, potentially influencing key decisions [[271]]. No price stabilization mechanism may lead to volatility on listing [[43]].
• Listing Risks: If the public shareholding spread is not met, listing could be aborted and funds returned [[43],[269]].

Growth Strategy: Network Expansion & Product Portfolio

Expansion of Retail Network: Proceeds will support opening new outlets and consignment counters, primarily in Malaysia, leveraging established e-commerce channels.

Working Capital: Significant allocation to inventory and operating costs to support revenue growth.

Brand Development: Ongoing investment in proprietary and licensed brands to strengthen market positioning.

Capex Pipeline: No major M&A or overseas expansion is highlighted, with growth focused on deepening local market penetration [[47]].

Ownership, Lock-Ups, and Shareholding Structure

Pre-IPO Shareholding: Promoters hold 79.82% (Dato’ Lee and Mr. Loh).

Post-IPO Shareholding: Promoters will retain 55.80% collectively (174.5m and 163.6m shares, respectively).

Lock-up: Promoters and specified shareholders are subject to a moratorium period as required by Bursa Securities. Exact duration is not stated [[34]].

Other directors, employees, and connected parties hold minor stakes post-IPO.

Valuation and Peer Comparison

Basis for IPO Price: The offer price was determined with reference to:

• EPS of 1.38 sen (FYE 2025 audited PATMI: RM8.35m, 606m shares) – P/E multiple [●]x
• Adjusted EPS of 1.83 sen (FYE 2025 adjusted PATMI: RM11.08m, 606m shares) – P/E multiple [●]x
• Pro forma NA per share: RM[●] (post-listing)

No peer comparison table is provided in the prospectus. The offer price implies a premium to book value and historic earnings, reflecting growth prospects and brand value [[44]].

Dividend Policy

No explicit dividend policy or commitment is stated in the prospectus. Investors should evaluate the company primarily on growth and capital appreciation potential.

Research & Opinions

No analysts, covering institutions, or price targets are included in the prospectus.

IPO Allotment Results

Not disclosed at the time of publication. Clawback and reallocation mechanisms ensure full subscription of retail and employee tranches, with institutional tranches placed via selected arrangements [[42]].

Listing Outlook: Strengths and Considerations for Investors

Based solely on prospectus data, EMPG Group Berhad’s IPO offers:

• Resilient revenue streams and strong brand positioning in a defensive consumer segment
• Solid balance sheet and moderate gearing, with proceeds earmarked for expansion and working capital
• Broad investor allocation and underwritten retail tranches support a strong first-day performance, subject to demand
• Potential for listing day volatility, given absence of price stabilization mechanisms
• Risks from promoter control, sector competition, and modest recent earnings contraction

Inference: If the offer is priced at the lower end of the implied P/E range and public tranches are oversubscribed, the IPO could debut at a premium, with fair value supported by the company’s sector position and growth plans.

How to Access the Prospectus and Apply

Website to obtain prospectus: www.bursamalaysia.com

Application Channels: Applications are accepted via brokerages, participating banks, and e-IPO platforms. Pink Form allocation is available for eligible directors and employees. Application dates will be published on Bursa Malaysia and in major newspapers prior to opening. For detailed procedures, refer to the electronic prospectus on Bursa Malaysia [[5],[457]].