PETALING JAYA: The export market will remain the primary revenue generator for Synergy House Bhd
, which is en route to a listing on the ACE Market of Bursa Malaysia on June 1.
The company is expected to record an earnings growth of 17.8%, 17.9% and 11.9% to RM18.9mil, RM22.3mil and RM24.9mil for financial year 2023 (FY23), FY24 and FY25, respectively, supported by a better industry outlook.
Revenue, meanwhile, is expected to grow by 5%, 8% and 9% for FY23, FY24 and FY25, respectively, said TA Research.
Synergy’s revenue for FY21 surged by 50% year-on-year (y-o-y) to RM184mil, while core profit jumped 8% y-o-y to RM14mil.
Synergy is involved in the design, development and sale of ready-to-assemble home furniture.
The manufacturing works are outsourced to third-party manufacturers.
Its furniture products are mainly sold via the business-to-business and business-to consumer models.
Its initial public offering (IPO) entails a public issue of 80 million new ordinary shares, and an offer for sale of 50 million shares at an IPO price of 43 sen per share.
The firm is raising RM34.4mil, part of which will go to buying new equipment and pare debts.
On a pro forma basis, post-listing with utilisation of the IPO proceeds, Synergy’s balance sheet is expected to improve from a net debt position of RM35.6mil to a small net debt position of RM4.5mil.
The group is led by its executive directors, Tan Eu Tah and Teh Yee Luen, both of whom have about 26 years and 24 years of experience, respectively, in the furniture industry.
Synergy intends to further expand its customer reach via listing and selling its products on more third-party eCommerce platforms. It also plans to increase its inventories in the third-party eCommerce fulfilment centres located overseas.
It also wants to set up a new warehouse in Muar, Johor in 2023 as well as another new warehouse in Klang, Selangor in 2027 as its eCommerce fulfilment centres, TA Research said.
