Thursday 28 Mar 2024
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KUALA LUMPUR (April 1): Pawnshop operator Pappajack Bhd, which debuted on the ACE Market of Bursa Malaysia on Friday (April 1), rose to a high of 40 sen — a 10 sen or 33.33% premium over its initial public offering (IPO) price of 30 sen.

The counter opened up nine sen at 39 sen on Friday. At closing, it settled at 39.5 sen, still up 9.5 sen or 31.67%.

The counter, which was the most actively traded stock across Bursa, saw 202.3 million shares traded.

The group’s managing director and chief executive officer Lim Boon Hua said at a virtual press conference on Friday that it aims to transfer to the Main Market in the next two to three years.

“Transferring to the Main Market is our midterm target. We are bullish on the success of our IPO today (Friday),” he said.

Asked about the impact of the Russia-Ukraine crisis on gold prices, he said the group will be more cautious and careful in setting the margin for the loans it is giving out.

“With the current Russia-Ukraine crisis, gold prices are quite volatile and we are mindful of that. We will lower our loan margin a bit just to give more buffers in case gold prices drop,” he said.

Going forward, he said the group aims to open more pawnbroking outlets to expand its market share beyond 3% in Malaysia, and grow its top line and bottom line.

Pappajack is also eyeing to open five more pawnbroking outlets in Pulau Pinang, Pahang and Selangor in the next two to three years, he added.

“We are proud to announce that two new pawnbroking outlets are opened in Selangor and Pahang today (Friday), being part of the five planned new pawnbroking outlets, giving us a total of 27 pawnbroking outlets as of today,” Lim said.

Over the longer term, Lim said the group intends to set up and open new pawnbroking outlets or acquire third-party pawnbroking outlets in Peninsular Malaysia to widen its network and increase its market reach.

“When opportunities arise or when the time is right, we may acquire [a few] of the potential existing outlets,” he said.

Lim is also positive on the group’s business outlook for 2022. As Malaysia moves into the endemic phase of Covid-19, the increase of business activities will give the group tremendous opportunities, he added.

He opined that pawnbrokers will continue to play a vital role by supporting people who seek to obtain immediate funds to support their temporary financial needs in a manner that is convenient, quick and flexibly available.

The group raised RM50.1 million from its IPO. From the proceeds, RM27.08 million will be allocated as cash capital of Pappajack’s existing 20 pawnbroking outlets, while RM19.22 million will be used to fund the expansion of pawnbroking outlets, and the remaining RM3.8 million will be utilised for listing expenses.

At the closing share price of 39.5 sen, Pappajack had a market capitalisation of RM263.86 million.

Edited ByAdam Aziz & Surin Murugiah
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