I think I came across my first Eco-Shop outlet when I was in Ipoh with my wife.
My wife is one who can spend hours inside Eco-Shop. It is her place to do treasure hunting. She often ends up spending hundreds, purchasing dozens of items and accessories where each one of them are priced just above RM 2. There’s always a smile from my wife after exiting Eco-Shop. That to me is a classic example of retail therapy.
Over time, I saw more Eco-Shop outlets in the Klang Valley. It is mushrooming.
My wife asked if Eco-Shop is listed or owned by a public-listed company. Before this, my answer is no. That changed on 29 April 2025, when Eco-Shop officially released its IPO Prospectus and invited the public to subscribe its IPO shares at RM 1.21 per share. These shares are scheduled to be listed on Bursa Malaysia on 23 May 2025.
Source: Eco-Shop Marketing Bhd’s IPO Prospectus
Here, I’ll make a list of 11 main things to know about Eco-Shop after reading its IPO Prospectus. They are as follows:
1. Suppliers
Eco-Shop retails thousands of stock-keeping units (SKUs) of general merchandise, hygiene and cleaning products and food products in its retail outlets. These products are either imported from China, Turkey, Thailand, and Indonesia or locally-sourced from over 900 end-suppliers. The split between imported and locally-sourced products is 65.5% and 34.5%. Currently, Eco-Shop would receive all the imported products at its Klang Distribution Centre and its locally-sourced products at Jementah Distribution Centre.
Eco-Shop was granted credit periods between 14-90 days from its suppliers.
Of which, Eco-Shop maintained its creditor days at 36-40 days in 2022-2024. Hence, it indicates that Eco-Shop took, on average, 36-40 days to settle its bills after receiving them from suppliers.
Source: Eco-Shop Marketing Bhd’s IPO Prospectus
2. Inventories
Upon receiving inventories, Eco-Shop packs, repackages and delivers them to stores across the Peninsula Malaysia via a fleet of over 160 delivery trucks. For East Malaysia, these products are shipped from Port Klang by third-party providers. For Langkawi, Eco-Shop would first deliver the products to Kuala Kedah and subsequently, be ferried over after clearing customs.
3. Store Count and Format
Eco-Shop had expanded its retail network, up from 227 stores on 31 May 2022 to 358 stores on 31 March 2025 under two formats: Eco-Shop and Eco-Plus.
Source: Eco-Shop Marketing Bhd’s IPO Prospectus
Eco-Shop offers a smaller store format. The smallest formats are store sizes that range between 2,000-3,999 sq. ft. and they retail around 5,000 SKUs. The biggest format consists of stores that range between 10,000-15,999 sq. ft. which retail 11,000 SKUs. Today, these products are priced at RM 2.60 each in Peninsula Malaysia and RM 2.80 each in East Malaysia.
Eco-Plus offers a bigger store format that can carry 13,000 SKUs in 16,000-19,999 sq. ft. stores. These products are priced at RM 2.60, RM 6.00 and RM 10.00 in Peninsula Malaysia while their prices in East Malaysia are set at RM 2.80, RM 6.60 and RM 11.00.
Source: Eco-Shop Marketing Bhd’s IPO Prospectus
On average, Eco-Shop maintained its inventory days at 65-70 days in 2023-2024. This indicates that it took, on average 65-70 days, to convert inventories received into revenues.
Source: Eco-Shop Marketing Bhd’s IPO Prospectus
4. Cash Conversion
For the financial period ended (FPE) on 30 November 2024, Eco-Shop had taken about 68 days to convert its inventories into sales. Debtor days are negligible as it generates cash revenues. In its prospectus, its debtor days is 1 day which is the time difference between its sales transaction and when financial institutions release payments to Eco-Shop. As such, Eco-Shop took 69 days, converting inventories into cash.
Eco-Shop took around 36 days to settle bills after receiving them from suppliers. So, Eco-Shop’s cash conversion cycle is 33 days. It means, Eco-Shop doesn’t need to reserve as much working capital as compared to other retailers which have a higher cash conversion cycle. Such can free up cash flows, enabling Eco-Shop to either focus on expansion activities or pay out dividends as a way to reward shareholders.
Source: Eco-Shop Marketing Bhd’s IPO Prospectus
5. Profitability
In 2022-2024, Eco-Shop increased its revenues from RM 1.57 billion to RM 2.40 billion. Its sales growth was attributed to a combination of growing retail outlets and higher sales transactions for that period.
Gross margins had improved marginally from 19.6% in 2022 to 26.4% in 2024. This is a result of a slight increment in retail prices from RM 2.20 to RM 2.40 from 1 June 2022 onwards. Net profit margin had improved from 1.7% in 2022 to 7.4% in 2024. It was primarily attributable to stronger gross margins and as well as effective control of selling, distribution, and administrative costs. In the three-year period, Eco-Shop grew its shareholders’ earnings from RM 27.1 million in 2022 to RM 177.3 million in 2024. Earnings per share (EPS) grew from 0.47 sen in 2022 to 3.08 in 2024.
Source: Eco-Shop Marketing Bhd’s IPO Prospectus
6. Balance Sheet
Eco-Shop kept its current ratio above 1.0 in 2022-2024. On 30 November 2024, Eco-Shop owed RM 434.0 million in net debt. In 2022-2024, it had brought in, on average RM 182 million in cash flows from operations per year. As such, Eco-Shop has the ability to repay its net debt within 2-3 years.
Source: Eco-Shop Marketing Bhd’s IPO Prospectus
7. IPO Proceeds
Eco-Shop plans to raise RM 419.9 million in gross proceeds from its IPO listing. Of which, it would allocate these amounts into the following:
a. Opening of New Stores (RM 56.3 million)
This is to partly finance the opening of 70 new Eco-Shop outlets across Malaysia.
Source: Eco-Shop Marketing Bhd’s IPO Prospectus
b. Expansion of Distribution Centres (RM 200.0 million)
It is to partly fund its acquisition of a freehold industrial land measuring 307,560 sqm in Klang for RM 241.9 million. Eco-Shop plans to construct a semi-automated distribution centre in 2026 and complete this project by 2027. This could support the rising distribution and storage needs of the planned growth in its retail network across Malaysia.
c. Repayment of Bank Borrowings (RM 100.0 million)
Based on 3.88% in interest rate, Eco-Shop would save RM 3.88 million in interest costs after the company had repaid RM 100.0 million in borrowings.
d. IT Hardware and Software (RM 10.9 million)
This includes systems such as ERP, HRM, CRM, warehouse management, retail outlet, firewalls and property management systems that could enhance efficiencies throughout its organisations.
e. Working Capital (RM 24.7 million)
This is mainly to support its day-to-day operational expenses.
f. Listing Expenses (RM 28.0 million)
They include professional, brokerage, underwriting, placement and other fees.
8. More Distribution Centres
In addition to its plans in Klang, Eco-Shop is also working on expanding the distribution centre in Jementah by optimising its current space, constructing a new warehouse building, and acquiring new equipment such as conveyors, forklifts and reach trucks. The expansion shall be completed by 31 May 2026 and would raise its daily throughput capacity from 2.7 million to 3.8 million.
Also, Eco-Shop rents the warehouse annexed to Eco-Shop Petra Jaya at Kuching, Sarawak. It’s renovating, shelving and equipping the warehouse. The target completion is in Q2 2025. In Kota Kinabalu, Eco-Shop acquired a piece of land in 2021, which can be used as a distribution centre in the medium-term.
9. Major Shareholders
Dato’ Seri Lee Kar Whatt shall remain as the biggest shareholder of Eco-Shop with 75.1% direct and indirect shareholdings in the company. He leads the company as its Managing Director.
In addition, Creador retains 1.9% shareholdings in Eco-Shop upon listing. Lum Ying Ling, a Vice President of Creador, represents Creador’s interests in Eco-Shop’s board as a non-independent non-executive director.
10. Dividend Policy
Eco-Shop targets a dividend payout ratio of 40-60% of its annual shareholders’ earnings.
11. Valuation
At RM 1.21, its IPO shares are valued at P/E Ratio of 39.28 of its EPS of 3.08 sen in 2024, after taking into account an enlargement of number of shares after its IPO listing.
Conclusion:
Upon successful listing, Eco-Shop would boast a market capitalisation of RM 6.95 billion. It shall be the biggest IPO listing to-date in 2025. So, is this price tag worth it for 358 outlets that earned RM 177.3 million in 2024, which have a series of initiatives to expand its distribution centres and retail outlet by another 70 stores in the future? That is for you to decide and answer.
You can study its IPO Prospectus more in-depthly and evaluate its pros and cons as an investment to your own stock portfolio. At the end of the day, what is suitable for one isn’t suitable for another.
IPO Prospectus:
Eco-Shop Marketing Bhd – Part 1
Eco-Shop Marketing Bhd – Part 2
Eco-Shop Marketing Bhd – Part 3
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