Shah Alam, June 1: Synergy House Berhad, a cross-border e-commerce seller and furniture exporter that specialises in the affordable ready-to-assemble home furniture, today debuted on the ACE Market of Bursa Malaysia Securities Berhad, opening at RM0.38 per share. Synergy is listed under the stock name “SYNERGY” and stock code “0279”.
Synergy House outsources all its manufacturing works to third-party manufacturers and sells its home furniture products via both business-to-business (“B2B”) and business-to-consumer (“B2C”) sales channels.
Via the public issue portion of the IPO, Synergy raised a total of RM34.4 million, out of which RM10.0 million is allocated to expand the Group’s B2C sales by purchasing inventories for the Group’s e-commerce fulfilment centres overseas as well as it’s proposed e-commerce-fulfilment-centre-in Muar, Johor.
In addition, RM1.5 million of the IPO proceeds will be used to fund the purchase of a racking system and forklifts for the proposed e-commerce fulfilment centre in Muar, Johor. Further, RM1.0 million of the proceeds will be used to implement advertising and promotion strategies on third-party e-commerce platforms to further boost the Group’s B2C sales.
Meanwhile, RM10.0 million of the proceeds has been allocated for repayment of borrowings and another RM7.7 million has been allocated for working capital purposes. The remaining RM4.2 million has been allocated for listing expenses.
“We would like to express our sincere appreciation to Bursa Securities for their approval of our listing, and to the Principal Adviser, Kenanga Investment Bank Berhad (“KIBB”), for their guidance and commitment throughout the entire process leading up to today,” Chairman of Synergy House, Mok Juan Chek said.
“While the listing of Synergy House enables the Group to have the funds for some of its current immediate expansion plans, the listing will also enable the Group to tap into the equity capital market for future fundraising while also providing the financial flexibility to pursue growth opportunities as and when they arise as the Group expects demand for home furniture to continue growing.”
According to the independent market research report prepared by Smith Zander International Sdn Bhd dated 12 April 2023 as disclosed in Synergy’s IPO prospectus dated May 12, global furniture e-commerce sales grew from USD59.43 billion (RM246.20 billion) in 2019 to USD82.41 billion (RM341.62 billion) in 2021, at a compound annual growth rate of 17.76 per cent.
Moving forward, the furniture e-commerce market is expected to continue to grow with the continuous adoption of online shopping amongst consumers. Further, the global demand for furniture is expected to remain strong over the long term as furniture are essential items to support daily activities. The global demand for furniture will continue to be supported by the recovery and growth in global economic conditions, growth in global population and urbanisation, growing popularity of furniture e-commerce and increasing consumer preference for RTA furniture.
KIBB is the Principal Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.
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