Johor-based Well Chip Group Bhd is seeking a listing on the Main Market of Bursa Malaysia, less than three months after pawnbroker Evergreen Max Cash Capital Bhd listed on the ACE Market in late September.

The emergence of pawnbrokers raising funds on local stock markets highlights the trend of Malaysians increasingly turning to pawn shops as the cost of living crisis dents household budgets.

Well Chip is offering 150 million new shares in its initial public offering (IPO), representing 25% of its enlarged issued share capital.

It will comprise a public offering of 30 million shares via balloting, 45 million new shares to selected institutional investors, and 75 million new shares for private placement to Bumiputera investors approved by the ministry of investment, trade and industry (Miti).

Well Chip is also involved in the retail and trading of jewellery. It has 26 outlets in Johor, comprising 22 pawnshops and four retail outlets adjacent to its pawnshops.

According to its draft prospectus, the group intends to utilise the IPO proceeds for the initial set up costs and working capital requirements for eight new pawnshops in Johor and Melaka.

“We intend to first develop and expand our network of pawnshops within Melaka and thereafter, we plan to venture into Negeri Sembilan,” the company said in the prospectus.

Well Chip’s profit after tax (PAT) rose by 5.79% to RM25.16 million for the financial year 2022 (FY2022) from RM23.78 million in FY2021 as revenue surged 55% to RM158.12 million from RM101.88 million a year earlier.

Well Chip plans to distribute dividends of at least 35% of its consolidated PAT for the first three financial years after its listing.

Evergreen debuted on the ACE Market on Sept 26 with an 8 sen or 33.33% premium over its IPO price of 24 sen. The group raised a total of RM64.2 million from the IPO.

At 2.35pm, its shares were up 1 sen or 2.5% at 41 sen, valuing the group at RM451.4 million. It is up 70.8% from its IPO price.