Souvanny Home Centre set for IPO
Souvanny Home Centre set for IPO
Local hardware chain Souvanny Home Centre Public Company is launching its initial public offering (IPO) today to list on the Lao Securities Exchange (L SX).
The company's IPO is making 25 million shares available for three days: November, 30, December, 1 and 3 at 3,100 kip a share, according to Lanexang Securities Public Company.
They believed the shares would be all sold within the first 2 days due to substantial interest from private and government investors, Lanexang Securities Public Company CEO, Mr Nalin Silavongsith told local media last week.
“A road show taking in Vientiane and the provinces of Khammuan, Savan nakhet, Champassak, Vientiane and Luang Prabang from November 5-16 had 70-80 percent of participants expressing interest in obtaining Souvanny Home Centre Public Company shares,” he said.
“We also provided the company's information to foreign investors in Singapore and received good feedback from investors,” Mr Nalin added.
With the funds raised through the IPO, the company intends to open three new branches. One will be on the 450 Year Road in Vientiane, while two others are planned for Pakxe district, Champassak province, and Pakxan district, Borikhamxay province.
The rest of the money raised would be used as working capital for the business, according to the company.
The fundraising will help the company to grow rapidly and increase its ability to compete against potential rivals with the looming Asean Economic Community (AEC).
Souvanny currently has four branches, in Phontong, Sikhai, Thongkha nkham, and Thongtoum, and imports about 80 percent of its quality products from Thailand and the rest from China. The company sells tiles, construction materials, roof tiles, home decor items, paint, tubing, electrical appliances, tools, sanitary ware, el evators, escalators, and furniture.
In 2014, Souvanny earned revenue of 311.37 billion kip and a net profit of 21.33 billion kip. In 2013, the company brought in revenue of 264.37 billion kip and recorded a net profit of 14.18 billion kip, while in 2012 the company earned revenue of 230.45 billion kip and a net profit of 10.64 billion kip.
The company's LSX listing would instil greater investor and customer confidence and give it a better reputation in the international market, according to APM (LAO) Securities Co., Ltd, a financial advisor to Souvanny.
Larger capital reserves can help the company to open new branches, new product lines, new target markets, and also new distribution channels aiming to generate a satisfying return for shareholders and investors.
