(From left) RHB Investment Bank Bhd regional head equity capital markets and syndication director Ankur Khandelwal, corporate finance head Tommy Har, chief executive officer and managing director Kevin Davies, Cuckoo International (Mal) Bhd executive director and chief executive officer Hoe Kian Choon, chief financial officer Bryan Yeong, chief operating officer Toh Seng Lee, chief marketing officer Queenie Goh, AmInvestment Bank Bhd chief executive officer Tracy Chen Wee Keng and AmBank (M) Bhd business banking managing director Christopher Yap Huey Wen at the prospectus launch of Cuckoo International in conjunction with its listing on the Main Market of Bursa Malaysia, scheduled for April 30, 2025.
PETALING JAYA: Cuckoo International (M) Bhd (Cuckoo Malaysia) is gearing up for expansion in both products and services as it looks to list itself on the Main Market of Bursa Malaysia Securities Bhd in April 2025.
The home appliance giant which originated from South Korea currently has four segments under its belt – Cuckoo, Cuckoo Co-Created, Wonderlab and Wonderdewi, as well as Wonderklean.
Chief executive officer Hoe Kian Choon said for 2025, new products will be launched for all four segments.
“We have a new product development team that does everything in-house, and we have plans this year to launch more products like the sofa bed and another type of water purifier,” he told reporters after the launch of Cuckoo Malaysia’s prospectus launch yesterday.
According to Hoe, Cuckoo Malaysia has a unique business model in which it allows customers to rent its products rather than buy it outright.
Buying the products is of course available, but Hoe said the larger part of the company’s revenue is actually derived from rental.
“About 90% of our business comes from rental so this has been the way for us to grow our business because by providing rental services, we are able to reach a wider group of customers and offer them an affordable method to own our products,” he said.
Hoe said despite needing more capital for the rental segment, they have always been a stronger competitor in this area.
For 2025, Hoe said the company has internally targeted a double-digit growth in revenue and it is expected to come from the rental segment as well.
At the moment, Cuckoo Malaysia is the sole distributor for Malaysia, Singapore and Brunei, and Hoe said they will continue to focus on these three countries for now.
“For the next three years, our focus will remain on Malaysia and the other two countries.
“Our future plans will include increasing our market share, increasing our offerings and capitalising on our business segments,” he says.
He explained that Wonderlab and Wonderdewi, which is a skincare and nutritional food provider, has its products currently sold at 224 Watson stores across the country.
“A part of our future plans include becoming an omni-channel to be able to reach more people, especially from business to customer.
“We will continue to plan to grow organically,” he said.
Hoe said all this is part of the company’s journey as they list on the local stock exchange next month.
Cuckoo Malaysia will aim to raise RM184.8mil through its initial public offering (IPO), priced at RM1.29 per share through the issuance of 143.28 million shares
The listing will offer up to a 25.5% stake in the company and post-listing, Cuckoo Malaysia is expected to be valued at RM1.85bil, valued at 21.2 times its earnings per share of 6.1 sen in the financial year ended Dec 31, 2023 (FY23).
Under the retail tranche, a total of 28.66 million new shares will be made available for application by the Malaysian public through balloting, while 14.33 million shares will be allocated for eligible persons.
The institutional tranche involves 222.08 million existing shares and 100.3 million new shares to Malaysian and foreign institutional, as well as select investors, through bookbuilding.
According to its prospectus, the company plans to allocate 56.7% of its IPO proceeds to fund product purchases for the expansion of its rental business; 21.6% for repayment of bank borrowings; 2.7% for the opening of Brandshops; 3% for upgrading of information technology systems and 5.4% for the expansion of Cuckoo International (S) Pte Ltd.
“Apart from broadening addressable markets, we believe this could also increase the cross-selling opportunities of our sales and service teams.
“Additionally, we plan to enhance our offline and online customer touchpoints and expand sales team to better service our customers,” he said.
Meanwhile, RHB Bank Bhd managing director Kevin Davies said on a corporate level, the listing on the Main Market for Cuckoo Malaysia is a testament to the company’s resilience.
“Cuckoo Malaysia has been a trailblazer for the rental segment and has set high standards in particular for its after sales services.
“With its listing, it is positioning itself and elevating its status in a strategic move that is set to unlock new opportunities,” Davies said.
RHB Investment Bank is the sole principal adviser, joint global coordinator, joint bookrunner, managing underwriter, and joint underwriter for the IPO.
Meanwhile, AmInvestment Bank is the joint global coordinator, joint bookrunner, and joint underwriter.
