The TP was determined using a price-earnings ratio (PER) of 15 times the group’s projected earnings per share (EPS) for the 2024 financial year (FY2024) of 2.3 sen.

This valuation stands below the Bursa Malaysia consumer products and services sector’s PER of 20 times and the average PER of SSF’s industry peers of 15.5 times.

The lower PER, said Apex Securities, reflected SSF’s less favourable market position given its small market share of 0.4% and smaller market capitalisation relative to its competitors.

“However, we hold a positive outlook for SSF due to its established branding, strong presence across Malaysia, and strategic store expansion plans,” it said.

SSF is principally involved in the retail of furniture, home décor and home living products.

Apex Securities projects the home furnishing retail sector in Malaysia to rebound in the long term due to the growing adoption of smart home technology and the recovery of the domestic property market.

The government’s continued commitment to the affordable housing programme also supports the sector’s recovery, it noted.

“Consequently, it is projected that the home furnishing retail industry will experience a compound annual growth rate (CAGR) of 9.3% from 2023 to 2027,” it said.

“Moving forward, we expect SSF’s revenue could reach RM187.3 million (+7% y-o-y) in FY2024, RM212.8 million (+14% y-o-y) in FY2025 and RM251.1 million (+18% y-o-y) in FY2026,” it added.

The group is scheduled for listing on Oct 12.