Shopper360 Limited - DBS Research 2017-06-27: IPO Factsheet

Shopper360 Limited - DBS Vickers 2017-06-27: IPO Factsheet SHOPPER360 LIMITED 1F0.SI

Shopper360 Limited - IPO Factsheet


Issue Statistics 

  • Offer Price: S$0.29 
  • Share Offer: 18.0m new shares, 20.0m vendor shares 
  • Market Cap: S$33.2m 
  • Close Date: 28 Jun 2017 
  • Share Trading: 30 Jun 2017 
  • Sponsor, Issue Manager and Placement Agents: ZICO Capital Pte. Ltd. , UOB Kay Hian Private Limited 


Business 

  • Shopper360 is a well-established shopper marketing services provider offering a comprehensive range of marketing and advertising services in the retail and consumer goods industries in Malaysia.
  • The company provides three broad categories of shopper marketing services: 
    1. in-store advertising and digital marketing; 
    2. field force management; and 
    3. sampling activities and events management.
  • Shopper360 connects customers with retail partners, namely hypermarkets, supermarkets, pharmacies and convenience chain stores. The company has access to in-store advertising space in over 1,900 retail outlets across 183 towns in Malaysia as at 17 May 2017. Current clients include Nestle, Colgate-Palmolive, F&N Beverage, Fonterra, Samsung, U Mobile and Huawei, and hypermarkets and supermarkets such as Giant, Cold Storage, Econsave, The Store, Billion, MYDIN and Aeon.


Competitive Strengths 


“One-stop” Shopper marketing services group 

  • Ability to provide a full suite of advertising, marketing and shopper engagement services through different business segments.

Established track record and reputation 

  • Shopper360 is a pioneer in in-store advertising in Malaysia since 1986, was a two-time recipient of the Enterprise 50 award, and placed top 10 in SME100 2014’s Malaysia Fast Moving Companies.

Strong Relationships with Customers 

  • Strong client-centric approach has resulted in high customer retention rates.

Established strong network of retail partners 

  • Established a strong network of retail partners comprising hypermarkets and supermarkets, convenience chain stores, as well as chain pharmacies.

Poised for the Digital Economy 

  • Experienced technology team and digital marketing team to provide shopper engagement solutions.


Business Strategies and Outlook 


Expansion of service offerings 

  • Shopper360 intends to introduce new innovative mediums, provide designing and development services on top of production and installation services, and gain more recognition through gaining more awards. 
  • The company also plans to expand operations and diversify.

Expansion of network of customers and retail partners 

  • Shopper360 intends to extend its retail advertising to shopping malls by end of 2018.

Expansion into new geographical locations 

  • Shopper360 intends to expand operations locally and to new geographical locations.

Exploring acquisitions, strategic alliances and/or joint ventures 

  • Shopper360 plans to expand their business through joint ventures and strategic alliances.

Prospects 

  • Shopper360 believes that the prospects for the business remain positive in view of 
    1. growing importance for shopper engagement and experience; 
    2. proliferation of retail stores; 
    3. rise in digital marketing; and 
    4. increasing need for in-store brand visibility.


Key Risks 


Ability to retain or expand network of customers and retail partners 

  • Failure to maintain or increase shopper marketing service performances and reputation may result in difficulties to retain or expand customers and retail partners network.

Dependent on major customers 

  • Exposed to risk of delays, claims, reductions or cancellations of orders from the major customers.

Reliance on skilled and experienced personnel 

  • Changes in applicable laws, regulations or policies of Malaysia, may result in labour shortages and/or increase operating costs.

Ability to secure contracts 

  • Business is largely project based and customers do not commit to long term contracts.

Inability to adapt to changing demands 

  • If the company is unable to adapt to or identify changing demands, preferences, or shopper marketing trends, business would be adversely affected.

Risks relating to economic, political, legal or social environment in Malaysia 

  • Any adverse development in the political situation and economic uncertainties in Malaysia could materially and adversely affect its results of operations.


Dividend Policy 

  • Shopper360 intends to distribute dividends of at least 20% of net profit attributable to shareholders for FY2017 and FY2018.




DBS Group Research DBS Vickers | http://www.dbsvickers.com/ 2017-06-27
DBS Vickers SGX Stock Analyst Report NOT RATED Maintain NOT RATED 99998 Same 99998



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