Cuckoo will begin trading on June 24, two months after postponing its initial public offering due to market volatility.
KUALA LUMPUR: A subsidiary of South Korean home-appliance maker Cuckoo Holdings Co is set to go public in Malaysia after a scaled-down offering that’s expected to raise RM395mil.
Cuckoo International (Malaysia) Bhd will begin trading on June 24, two months after postponing its initial public offering due to market volatility.
The final amount raised may vary as the company is waiting for approval from the bourse to reduce its public shareholding spread to 20% from the current 25%. Its revised offer price of RM1.08 per share, from RM1.29 previously, will value the company at RM1.55bil.
The company’s debut will be closely watched for clues on demand for consumption stocks given the tepid retail subscription rate for Cuckoo.
Chief executive officer Hoe Kian Choon is confident that its prospects and sizable market share in the local home-appliance rental segment will draw investors.
“A lot of our investors were happy” that the offering was put off to ride out the volatility sparked by the United States tariff announcement in April, Hoe said in an interview. “None of our cornerstone investors left.”
While market uncertainty remains high, the situation is “more stable now,” allowing the company to revive its listing plans, he said. Hoe, who founded the local company in 2014 as a distributor of Cuckoo products, has grown the business on the strength of its water purifier rental segment. Cuckoo Malaysia also co-creates some new products with other brands for the domestic market.
The company’s promising outlook prompted its South Korean supplier to take up a majority stake in the Malaysian firm.
Hoe said Cuckoo Malaysia has secured nearly a fifth of the local appliance rental market and opportunities to cross-sell products among its one million active-subscriber base would help the company achieve double-digit revenue growth over the next few years.
Cuckoo Malaysia’s profit after tax for the first nine months of 2024 jumped 75% from the previous corresponding period to RM104mil. Revenue rose 13%.
“Malaysia’s market is growing not only in the number of households but also in household debt,” Hoe said.
“Malaysians are looking for the best way to actually maximise their value for money. Rental will be one of the ways for them to enjoy a standard of living.”
Korean rival Coway Co’s wholly-owned local unit currently has market leadership in the rental space.
Hoe, a former Coway executive, aims to catch up with other Cuckoo offerings including mattresses, massage chairs and air purifiers. Consumer brands that are centred on mass-market affordability have done well in Malaysia.
Two of the country’s biggest initial public offerings (IPO) in the past year were retail chains that catered to customers looking to stretch the dollar – mini-mart operator 99 Speed Mart Retail Holdings Bhd
and dollar-store chain Eco-Shop Marketing Bhd.
Hoe said Cuckoo’s business fundamentals remain sound given little exposure to external shocks. While it is vulnerable to a stronger US currency – the company buys stock from its South Korean parent in dollars – strong recurring income from its rental segment helps ease the pressure.
Cuckoo will use proceeds from the IPO to open new concept stores that will allow cash-and-carry purchases and expand its business in Singapore.
For the first quarter ended March 31, 2025, Cuckoo International reported a net profit of RM27.86mil on revenue of RM296.28mil.
In a filing with Bursa Malaysia yesterday, the group said it remains committed to expanding its market presence by leveraging its strong brand presence, effective business model and omni-channel distribution network.
