Expansion, outlet chain enhance SSF Home Group

PETALING JAYA: With a 0.4% share of the local home furnishing retail industry worth close to RM47bil, coupled with attractive expansion plans and a strong market presence, the outlook is bright for SSF Home Group Bhd, says Mercury Securities.

The research house said SSF Home Group – bound for the ACE Market of Bursa Malaysia in the second week of October – is operating an extensive network of 41 retail outlets across the country that taps into a broad customer base.

Mercury Securities has a “subscribe” recommendation on the counter, with a fair value price of 38 sen, a 52% premium from its initial public offering price of 25 sen.

“The economies of scale derived from SSF Home Group’s wide network enhances its efficiency and allows it to offer cost-effective products, while the company’s substantial presence empowers it to introduce new products with minimal overhead costs,” Mercury Securities said.

Commenting on the group’s supplier base, the securities firm said SSF Home Group’s supplier network comprises 28 entities, including 19 local manufacturers, seven local trading houses, and one trading house in Hong Kong, all of which are unrelated to the company.

It added that the diversified supplier base enhances the retailer’s adaptability and bargaining power during price negotiations and contract discussions, as it mostly purchases from trading houses to access a wider range of designs and products, market knowledge and logistics support.

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