EMCC debuts on ACE market at a 33% premium

KUALA LUMPUR: Pawnbroker Evergreen Max Cash Capital Bhd (EMCC) made its debut on the ACE Market of Bursa Malaysia at 32 sen per share, a 33% premium against its initial public offering (IPO) price of 24 sen.

The group, which is also involved in the retail and trading of gold and luxury products, raised a total of RM64.2mil from its IPO exercise, with a bulk of it earmarked to finance the expansion of its pawnbroking business.

It has set aside RM30mil or 46.7% of the IPO proceeds to fund the additional cash capital of its pawnbroking business, while another RM20mil or 31.1%, has been allocated for the opening of up to five new pawnshops, called ‘Pajaking,’ in Kuala Lumpur, Selangor, and Pahang.

The remaining IPO proceeds of RM14.2mil or 22.2% will be used for repayment of bank borrowings, the group’s working capital purposes and to defray listing expenses.

During the launch of its prospectus, EMCC non-independent executive director Low Kai Loon told reporters that the group is still searching for suitable locations for its new pawnshops.

However, if they are unable to open those five new shops, Low said the group will instead acquire existing pawnshops.

Established in 2012, EMCC primarily operates in the pawnbroking business through its network of 22 “Pajaking” pawnshops located in Kuala Lumpur, Selangor, Negeri Sembilan, and Pahang.

In the first half of its financial year 2023 (1H23), EMCC recorded a revenue of RM52mil, marking a 72% increase compared to the RM30.3mil reported during the same period in the previous year.

Net profit in 1H23 also experienced growth, rising by RM1.3mil or 23.0%, to RM7.2mil from the RM5.9mil reported in 1H22.”

The increase in revenue was mainly due to growth in its pawnbroking segment, with pawn loans disbursed increased by RM29.0mil or 17.3% in 1H23 compared to 1H22.

Furthermore, the revenue uptick was also attributed to the growth in the gold and luxury products retail and trading segment, as a result of higher sales volumes of unredeemed pledged gold items from the pawnbroking business, as well as the inclusion of pre-owned gold products sourced from other third-party pawnshops during 1H23 in contrast to 1H22.