Carlo Rino Group Berhad, a Malaysian fashion retailer specializing in women’s handbags, footwear, and accessories, is transitioning from the LEAP Market to the ACE Market of Bursa Malaysia. Below is a detailed evaluation of the company’s Initial Public Offering (IPO):
Purpose of IPO: The company aims to raise approximately RM46.4 million through the issuance of 171,865,700 new ordinary shares at RM0.27 per share. The proceeds are allocated as follows:
RM15.0 million (32.32%) for the construction and fitting out of a new flagship boutique and other facilities, including IT and security systems.
RM3.53 million (7.54%) for the refurbishment of existing boutiques and counters at departmental stores.
RM0.51 million (1.08%) for the maintenance of IT infrastructure.
RM10.20 million (21.99%) for working capital, primarily for purchasing inventory.
RM3.00 million (6.47%) for advertising and promotional expenses.
RM10.0 million (21.55%) for rental expenses of boutiques.
RM4.21 million (9.05%) to defray estimated expenses for the corporate exercise and IPO.
Total Shares Offered: 171,865,700 new ordinary shares, representing approximately 21.34% of the enlarged issued share capital.
Offer Price: RM0.27 per share.
Allocation Breakdown:
48,876,000 shares available for application by the Malaysian public.
800,000 shares available for application by independent non-executive directors.
122,189,700 shares available via private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry.
Carlo Rino operates 36 boutiques in shopping malls, five boutiques at premium outlets, and consigns products to 82 departmental store counters, in addition to online sales. This diversified retail presence enhances its market reach and brand visibility.
The global handbag market is projected to grow at a compound annual growth rate (CAGR) of 5.4% from 2021 to 2028, driven by increasing consumer spending on fashion accessories and the rise of e-commerce. Regionally, Southeast Asia’s fashion retail sector is experiencing growth, supported by a burgeoning middle class and urbanization.
Principal Adviser, Sponsor, Sole Underwriter, and Placement Agent: TA Securities Holdings Berhad.
For the financial year ended June 30, 2024, Carlo Rino reported a net profit of RM19.31 million. At the IPO price, the company is valued at approximately 14 times its trailing earnings.
The public portion of the IPO, comprising 48.88 million shares, was oversubscribed by 18.43 times, indicating strong investor interest.
Based on the company’s strong financial performance, strategic expansion plans, and leading market position, the IPO appears to be a promising investment opportunity. While exact first-day trading prices are speculative, the stock is expected to trade strongly above the IPO price, reflecting investor confidence.
Based on the IPO price of RM0.27 per share and the positive market factors such as strategic use of proceeds, strong retail demand, and growth prospects, the expected traded price on the first day of trading is likely to range between RM0.35 and RM0.45 per share, representing a potential premium of 30% to 67% above the IPO price.
The prospectus for Carlo: https://anns.sgp1.cdn.digitaloceanspaces.com/3504017.pdf?utm_source=chatgpt.com
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