Convincing Features
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| Student name: | Student ID number: | ||
| Programme: | Master in Business Administration | ||
| Module: | Financial Management | ||
| Module code: | MBOC 7013 | Contribution to Overall Module Assessment (%): | 70% |
| Lecturer: | Ms Parimala Subramaniam | Internal Verifier: | Dr Cheng MG |
| Assignment Title: | Eco-Shop Marketing Berhad IPO | Word count (or equivalent): | 4500-5000 |
| Submission deadline: | 4th Week (19/10/25) -Background
8th Week (23/11/25) – Final |
Return date of provisional marks & written feedback: | TBA |
| Submission method: | All written assessments, where practical and possible, must be submitted via Turnitin unless otherwise instructed by the Lecturer. (Please DO NOT put this assessment specification into Turnitin or it will match many similarities with other students’ submissions.)
Alternative submission method (if applicable): Late submission of the assessment will result in a late penalty mark. Penalties for late submission: Up to one week late, maximum mark of 40%. Over one week late, 0%. Only the Extenuating Circumstances Panel may approve a change to submission dates. |
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| Academic honesty / referencing: | Academic honesty is required. In the main body of your submission you must give credit to authors on whose research and ideas your work is based. Append to your submission a reference list that indicates the books, articles, etc. that you have used, cited or quoted in order to complete this assessment. | ||
To: Board of Directors, BrightBridge Investments Sdn. Bhd.
From: Arunaranee Arunasalam, Chief Investment Officer
Date: 19th October 2025
Subject: Background Review – Eco-Shop Marketing Berhad Initial Public Offering (IPO)
This memorandum provides a comprehensive background review of the proposed Initial Public Offering (IPO) on the Main Market of Bursa Malaysia to be launched on 23 May 2025 concerning Eco-Shop Marketing Berhad. This background report aims to assist the Board in having an overview of the business model, industry environment, market opportunities, financial performance and future strategic direction of the company before a recommendation to make an investment takes place soon.
This introductory paper (Part A) provides the basis for the further financial and valuation analysis (Part B) that will be done.
Eco-Shop Marketing Berhad (“Eco-Shop” is a chain of value-retail outlets that supplies consumers with fixed-priced consumer goods, and was opened in 2003. The firm has grown to become the leading dollar-store retailer in Malaysia over the past twenty years, since it started as a small-scale retail with the mission “Making Life Easier”. The business model involves providing basic day-to-day products at standard low prices of RM 2.60 on the Peninsular side and RM 2.80 on the East Malaysian and Langkawi side of the country.
Eco-Shop operates a national network of retail stores located across 358 locations, 22 of which are at Eco-Plus concept stores as of 31 December 2024, which sell high-quality product assortments. The presence in a big way in urban and semi-urban areas ensures it can penetrate deep into the country in terms of mass-market and consumers with the lower middle-income bracket (Bursa Malaysia, 2025).
The company has scored a leading level of market share of 67.8% (by revenue) in the dollar-store market of Malaysia, and they still enjoy the brand loyalty, cost leadership, and economical distribution channels.
Their operations are based on a high-volume, low-margin model with economies of scale and centralised procurement, which is at the core of the activity of Eco-Shop (ECO Shop, 2025). The company has more than 450 suppliers, both locally and internationally, which has allowed it to maintain constant replenishment of the products and a variety of stock-keeping units.
The business model focuses on:
This method reflects competitive discount retail brands in competitive markets (with examples such as Dollar Tree US, Daiso Japan, and MR DIY in Malaysia) but is locally limited in pricing and product offering.
Eco-Shop’s IPO is one of Malaysia’s largest IPOs in 2025, with a planned market capitalisation of around RM 7.1 billion based on an IPO price of RM 1.22 per share (ECO Shop, 2025), as well as a post-IPO distended share base of 5.846 billion shares (ECO Shop, 2025). The sharing structure for the IPO is abridged below:
The cornerstone investors are the 5 major stockholders support the corporate book of Eco-Shop. Together, they committed 90.91 million shares, which is nearly 90 % of the institutional offering ( The Exchange Asia, 2025). This demonstrates robust market assurance. The compilation features:
The funds generated by this issuance will be utilised in enhancing the capability of the company to run and strengthen its financial position.
| Purpose | Amount (RM million) | Percentage |
| Expansion of distribution centres | 200.0 | 47.6 % |
| Expansion of retail footprint | 56.3 | 13.4 % |
| Repayment of bank borrowings | 100.0 | 23.8 % |
| Investment in IT hardware/software | 10.9 | 2.6 % |
| Working capital + IPO expenses | 52.7 | 12.6 % |
This strategy is aligned with the objective of Eco-Shop in terms of growing its business, decreasing debt, and enhancing its technology (GOH, 2025). The steps are relevant in order to remain competitive in the retailing industry.
For the fiscal year concluding on 31 May 2024 (FY2024), Eco-Shop reported:
The profit after tax (PAT) of the company stood at RM 93.19 million, which is growing steadily in the six months ending on 30 November 2024. Financial performance indicates that Eco-Shop can sustain its further growth despite the increased costs and inflation, even after the pandemic (Jing, 2025). From 2020 to 2024, revenue has increased on average by approximately 21 %. This has come about due to the opening of new stores and good sales by the old ones.
The net gearing ratio was 0.80 for Eco-Shop before the IPO, which was primarily a result of loans borrowed to expand the stores. This debt is likely to be paid off after the IPO to reduce the gearing to about 0.31. This will enhance its cash flow and the way it deals with its finances. It takes an average of 34 days to convert inventory and receivables into cash, compared to the average of 148 days to convert inventory and receivables into cash among the major competitor MR DIY Group Berhad (Latham & Watkins, 2025). This indicates that the company is controlling its stock and customer receipts.
Eco-Shop is implying a price-to-earnings (P/E) ratio of approximately 39 times the earnings per share in FY 2024 at the IPO price of RM 1.21. This tends to be comparable with or slightly below the valuation of MR DIY during its IPO. The company will also distribute dividends amounting to 40 % of its annual PAT, which indicates that the management is keen on delivering value to the shareholders.
Looking to the future financial outlook, Kenanga Research predicts the core net profit of Eco-Shop to be RM 206 million in FY2025 and RM 265 million in FY2026 (Trading View, 2025). This will be achieved by opening approximately 70 new stores annually and enhancing the supply chain by having more efficient distribution centres.
According to an independent market report, the industry will expand at a rate of 14.2 percenting a compound annual growth rate (CAGR) between 2024 and 2029. The Malaysian value-retail or dollar-store industry is relatively new in its infancy, relative to the economies of other developed countries. This growth will be driven by:
Currently, every million people have approximately 23 stores. There are 87 stores in Japan and more than 100 stores in North America (Bursa Malaysia, 2025). This indicates that there is much to be done in terms of expanding into the local market.
The key competitors of Eco-Shop are MR DIY Group Berhad, Ninso, and the low-end stores of Econsave. MR DIY has a wider variety of products and is more widely known around the world. Compared, the simple and fixed pricing strategy used by Eco-Shop stands out due to its ability to attract low-income consumers in Malaysia.
The GDP growth of Malaysia stands at about 4.5 % in 2024, and the inflation rate stands at 2.8 %. These aspects provide a steady retail environment among consumers. The Madani Economy Framework and the Bumiputera Empowerment Agenda are some of the government programs that favour the local retail enterprises through promoting local consumption and enterprise (The Exchange Asia, 2025). The patterns of consumer spending, however, are sensitive to economic changes and variations in subsidies, and this illuminates the need to maintain price stability at Eco-Shop.
Once listed, the founder and Managing Director, Datuk Seri Lee Kar Whatt, is likely to maintain a 75 % control, which would provide a steady strategic direction (GOH, 2025). Creador Malaysia II Sdn Bhd is a privately-owned equity fund that is expected to own approximately 1.9 % and the rest of the shares are open to the market.
Eco-Shop’s board of management team has seasoned retail records of over 20 years in the retail industry. The board consists of the executive directors and independent directors, and they adhere to the principles provided in the Malaysian Code on Corporate Governance (2021).
Furthermore Eco-Shop highlights eco-friendly pro ESG approaches with initiatives for waste reduction and energy-saving lighting in retail locations (Jing, 2025) and sustainable sourcing practices with nearby small and medium enterprises and local vendors.
Eco-Shop remains a strong and trusted brand, yet several factors could affect its long-term growth. Rising transport and material costs continue to compress margins under its fixed-price model. Dependence on imported goods exposes it to currency and supply-chain risks, while labour shortages and tighter competition from MR DIY and Ninso may pressure performance. Concentrated founder ownership could also limit governance flexibility, though the company adheres to MCCG 2021 standards.
Despite these challenges, the IPO received positive investor response. Upon debut on 23 May 2025, the share price rose 10 percent above issue price to RM 1.25, signalling confidence in Eco-Shop’s scalability and business resilience. Analysts from Kenanga and RHB Research rated the IPO as “Fairly Valued to Attractive,” underscoring continued optimism for Malaysia’s value-retail segment.environment.
Eco-Shop is well-positioned to capture shifts in consumer spending within the mass market. Supported by strong fundamentals and institutional confidence, its growth will come from expanding into East Malaysia and secondary cities, developing own-label products, adopting digital analytics and automation, strengthening e-commerce and sustaining long-term value in Malaysia’s resilient retail landscape.
Bursa Malaysia. (2025a). Eco-Shop Marketing Bhd. https://my.bursamalaysia.com/stocks-details?stockcode=ECOO.KL
Bursa Malaysia. (2025b). Home: Eco-Shop Marketing Berhad. IPO Prospectus Summary. https://www.bursamalaysia.com/
ECO Shop. (2025a). About Us. https://www.eco-shop.com.my/about-us
ECO Shop. (2025b). Contact Us HQ & KL Office. https://www.eco-shop.com.my/contact-us
The Exchange Asia. (2025, May 23). Eco-shop makes strong main market debut following RM392 million IPO. https://theexchangeasia.com/eco-shop-makes-strong-main-market-debut-following-rm392-million-ipo/
GOH, N. (2025, May 23). Malaysian retailer Eco-Shop rises over 10% in market debut after $91M IPO. Nikkei Asia. https://asia.nikkei.com/business/markets/ipo/malaysian-retailer-eco-shop-rises-over-10-in-market-debut-after-91m-ipo
Jing, T. Y. (2025). Eco-Shop Marketing NOT RATED. Every Ringgit Counts. https://www.kenanga.com.my/wp-content/uploads/2025/05/ECOSHOP-250519-IPO-Note-Kenanga.pdf
Latham & Watkins. (2025). Latham advises Eco-Shop on its US$230 million IPO. Latham Advises Eco Shop on Its US230 Million IPO. https://www.lw.com/en/news/2025/07/latham-advises-eco-shop-on-its-us230-million-ipo
Trading View. (2025). ECOSHOP stock price and chart. TradingView. https://in.tradingview.com/symbols/MYX-ECOSHOP/
You are the Chief Investment Officer (CIO) of an international investment firm. Your firm has been invited to participate in the largest Initial Public Offering (IPO) on Bursa Malaysia in 2025, launched by Eco Shop Marketing Berhad — a retail company similar to 99 Speedmart, Mr. DIY, Daiso, or Miniso.
Your task is to analyze Eco Shop’s IPO and prepare a memo to your company’s Board of Directors (BOD), recommending whether your firm should subscribe (invest) or decline (not invest) in this IPO. (I would choose to subscribe / invest)
You may name your firm creatively (e.g., “ABC Investments Ltd.”) and use your own name in the memo if preferred.
To critically evaluate the investment potential of Eco Shop Marketing Berhad’s IPO by integrating:
You must demonstrate the ability to:
Your report will follow a memo format, addressed from you (CIO) to the BOD of your investment firm.
Suggested layout:
To: Board of Directors, [Your Company Name]
From: [Your Name], Chief Investment Officer
Date: [Insert Submission Date]
Subject: Investment Evaluation – Initial Public Offering (IPO) of Eco Shop Marketing Berhad
The total report should be 4,500 – 5,000 words, divided into two submission parts:
| Part | Content | Deadline |
| A | Background Section | Week 4 (18 October 2025) |
| B | Full Report (Analysis, Findings, Recommendation) | Week 8 (via Turnitin submission) ** 22 November 2025 |
⚠️ Word limit tolerance: up to 5,500–5,700 words is acceptable, but exceeding is not allowed.
Explain why this evaluation is being prepared.
Example:
“The purpose of this evaluation is to provide a detailed analysis and assessment of the Initial Public Offering (IPO) of Eco Shop Marketing Berhad, for the consideration of the Board of Directors in deciding whether to subscribe or decline the IPO investment.”
A concise overview summarizing:
It should serve as a snapshot of your report — allowing the reader to understand your conclusion at a glance.
Example start:
“This executive summary evaluates Eco Shop Marketing Berhad’s IPO and concludes that the offering presents a favorable investment opportunity due to its strong market position, growth potential, and fair valuation.”
Provide context and justification for analyzing Eco Shop.
This section must demonstrate your understanding of:
✅ Important: Paraphrase and interpret the information — do not copy directly from the prospectus or websites.
Add your own analytical insight to show why these points are significant for investors.
Suggested length: 1,000–1,200 words.
Part A : Background is completed
(To do: Continue Part B)
Explain how you conducted your analysis. You can state:
“The method of analysis applied in this evaluation combines qualitative and quantitative approaches, drawing information from the IPO prospectus and industry reports.”
Recommended Methods (Choose at least 3):
📊 You do not need to use all the methods.
Choose three well-justified approaches and apply them clearly.
This is your final decision and justification to the Board of Directors.
You can begin with:
“After evaluating the Initial Public Offering (IPO) of Eco Shop Marketing Berhad, my recommendation as the Chief Investment Officer is to subscribe to the IPO.”
If you choose to recommend subscribing, justify with strong reasons.
If you reject, explain logically why the risks outweigh the benefits.
Sample Recommendation (Subscribe):
Recommendation:
I strongly recommend subscribing to the Eco Shop IPO due to the following reasons:
Conclusion:
“Although every investment carries inherent risk, Eco Shop’s business fundamentals, sector growth potential, and prudent capital utilization make this IPO a strategically sound investment for our firm.”
If you wish, you may also discuss alternative strategies, such as partial investment or delayed entry if market conditions worsen.
| Section | Suggested Word Range |
| Purpose | 150 |
| Executive Summary | 200 |
| Background (Part A) | 1,000–1,200 |
| Methods of Analysis, Findings & Comments | 2,000–2,500 |
| Recommendation & Conclusion | 600–800 |
| Total | 4,500–5,000 words |
✅ Use your own words — avoid copy-pasting from the prospectus.
✅ Support every claim with data, reasoning, or financial logic.
✅ Use at least three analytical methods.
✅ Stay within the word count limit.
✅ Maintain a professional memo tone — concise, factual, and persuasive.
Final Note
The goal of this assignment is not only to analyze Eco Shop’s IPO but to demonstrate your analytical, strategic, and financial decision-making skills as a future investment leader.
Approach it as if you are preparing a real corporate investment recommendation for your firm’s board.
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