KUALA LUMPUR: Senheng New Retail Bhd felt the brunt of extended bearish investor sentiment, with a sluggish debut on Bursa Malaysia's Main Market on Tuesday.
Senheng, the first listing on the Main Market this year, opened at 90 sen, 15.9 per cent shy of its initial public offering (IPO) price of RM1.07, in a brisk trading.
As at 4.45pm, it was traded at 86 sen, hitting a low of 85.5 sen and a high of RM1.04, and was the second most active stock with 160.56 million shares traded.
Bursa's bellwether FBM KLCI was down 16.97 points to 1,504.89 at midday before paring the loss slightky to settle at 1,507.52 as at 4.45pm.
On Monday, the index extended its loss on the first day of the week, down 5.20 points to close at 1,521.86, amid weak investor sentiment as anxieties grew over the US Federal Reserve's interest rate hike and asset tapering plans, Rakuten Trade said.
The firm said FBM KLCI might dip further before any meaningful rebound could be seen.
Senheng executive chairman Lim Kim Heng agreed that now might not the perfect time to get listed.
However, he said the company's fundamentals remained strong.
"Looking at the worldwide environment, it seems like our timing was not very right. But I think the opening price is quite okay for us as compared to our IPO price. The fundamental of our business is still strong. Based on our recently announced third quarter (Q3) financial results, Senheng is still on the right track for growth.
"We will be announcing our Q4 results next month and hopefully, our investors will be happy with the figures," he told reporters after the company's listing ceremony on Tuesday.
Rakuten Trade, which has a "Buy" call on Senheng, is bullish about the country's largest home-grown consumer electrical and electronics (E&E) chain retailer.
"Senheng is benefitting from increasing demand in the E&E consumer products supported by innovation E&E consumer products and growing disposable income.
"Therefore, we forecast a three-year revenue and net profit compounded annual growth rate of 12.8 per cent and 19.9 per cent to RM1.86 billion and RM95.5 million for financial year 2023 (FY23)," it said.
Senheng's net profit for Q3 ended September 30, 2021 dropped 22.19 per cent to RM10.69 million from RM13.74 million recorded in the same quarter a year ago.
The company said this was mainly due it continuing to incur operating and administrative expenses, such as staff salaries, during store closures caused by the Covid-19 lockdown.
Its Q3 revenue slipped 2.56 per cent to RM313.81 million from RM322.07 million, mainly attributable to the shutdown of physical stores due to the Covid-19 lockdown.
In contrast, Senheng's gross profit increased by about RM1.2 million or 1.8 per cent to RM67.2 million from RM66 million for Q3.
This was on replacement of the previous credit token, namely the EZ Credit, which was earned from purchases of selected products, and the introduction of the new credit token known as the "S-Coin" in June 2021.
For the nine-month period, Senheng's net profit increased 21.22 per cent to RM34.05 million, compared with RM28.09 million a year earlier, while revenue rose 12.29 per cent to RM987.72 million from RM879.6 million.