Synergy House Bhd Archives

Synergy House Achieves Record Growth with RM69.2 Million Revenue, Profits after Tax Surge by 30.24% in 3Q FY2023

Synergy House Berhad (“Synergy House” or the “Group”), a cross-border e-commerce seller and furniture exporter of ready-to-assemble (“RTA”) home furniture, today announced outstanding financial results for the third quarter ended 30 September 2023 (“3Q FY2023”).

Executive Director of Synergy House, Mr. Tan Eu Tah

In a remarkable display of growth, the Group reported a robust revenue of RM69.2 million and profit after tax (“PAT”) of RM8.1 million for 3Q FY2023, indicating significant quarter-on-quarter improvements. This exceptional performance for the current quarter is largely attributed to Synergy House’s business-to-consumer (B2C) sector’s improved margins, along with the strong growth in its business-to-business (B2B) operations.

Executive Director of Synergy House, Mr. Teh Yee Luen

The Group’s diverse global reach was highlighted in its regional revenue contributions: the United States of America (“USA”) led with RM30.9 million, underscoring its position as the largest market and a testament to the Group’s impactful B2C strategy. The United Kingdom followed closely with RM27.6 million, while the United Arab Emirates contributed RM8.6 million.

For the 9-month period ending 30 September 2023, the Group reported a total revenue of RM179.4 million and a PAT of RM16.9 million, surpassing the PAT of RM16.6 million recorded in the previous 12-month financial year ended 31 December 2022.

The B2C segment was particularly significant, contributing RM77.1 million for the 9-month period ending 30 September 2023, surpassing the total B2C revenue of RM49.6 million recorded in the previous 12-month financial year financial year ended 31 December 2022. This underscores the success of Synergy House’s targeted focus on and investment in the B2C sector.

Executive Director of Synergy House, Mr. Tan Eu Tah said, “The current quarter’s extraordinary results are a clear indicator of the effectiveness of our strategies, particularly in the B2C segment. Notably, our geographical diversification of our B2C segment to UK started to provide positive outcome with an impressive quarter-on-quarter growth of approximately 95%, with revenue reaching RM2.1 million in the third quarter of FY2023, reinforcing our position as a key player in this significant market. Our focused approach in expanding our online presence and enhancing customer engagement has paid off, leading to remarkable growth in both our B2B and B2C segments. We are thrilled with the progress and are committed to continuing our journey towards becoming a dominant force in the global furniture e-commerce market.”

Executive Director of Synergy House, Mr. Teh Yee Luen said, “We are immensely proud of our team’s efforts in achieving these results. The growth in our B2C segment, especially, represents our commitment to meeting consumer demands and adapting to market trends. Our strategies to enhance online visibility and customer reach, coupled with our focus on design innovation, are essential components of our long-term growth plan. We are confident that these strategies will enable us to further strengthen our market position and achieve sustainable growth.”

Looking forward, Synergy House is poised for continued growth with plans to enhance its B2C segment through various strategic initiatives and expand its product range through continuous design and development efforts, and explore opportunities to reach new audiences by expanding to new e-commerce platforms and entering untapped markets in different countries.

Despite global economic challenges, the Group remains optimistic about its prospects in the global furniture e-commerce market, supported by its competitive pricing and established presence in key markets such as the USA, UK, and Canada.

As at 23 November 2023, the share price of Synergy House is RM0.57, representing a market capitalisation of RM285.0 million.

Synergy House Posts Revenue of RM51.6 Million in 1Q FY2023

Group announces first interim financial report enroute to ACE Market listing

Synergy House Berhad, a cross-border e-commerce seller and furniture exporter of ready-to-assemble (RTA) home furniture, announced today that the Group recorded revenue of RM51.6 million for the first quarter ended 31 March 2023 (1Q FY2023) from sales in the business-to-business (B2B) and business-to-consumer (B2C) market segments.

For 1Q FY2023, the Group registered profit before tax of RM3.6 million and profit after tax of RM2.6 million. There are no comparative figures for 1Q FY2023 as this is the first interim financial report that Synergy House is announcing in compliance with the listing requirements of the ACE Market of Bursa Malaysia Securities Berhad.

The Group’s B2B segment recorded a revenue of RM27.4 million or approximately 53.10% of the Group’s total revenue while the B2C segment recorded a revenue of RM24.2 million or approximately 46.90% of the Group’s total revenue in 1Q FY2023. In comparison, the B2C segment’s contribution towards total revenue in the full financial year 2022 was at 25.57%. On a geographical basis, the United States of America was the Group’s largest market, contributing to approximately 49.47% of the Group’s revenue in 1Q FY2023.

Executive Director of Synergy House, Mr. Tan Eu Tah said, “As the Group enters the final stages of its initial public offering (IPO) journey, we want to reiterate that there is long-term potential in the B2C market segment for RTA home furniture. Synergy House is currently in market expansion mode whereby we are focusing on investing in our B2C sales channel aggressively for wider market outreach. For the first quarter ended 31 March 2023, we have achieved total B2C revenue of RM24.2 million, which is close to 50% of our total B2C revenue for the full financial year ended 31 December 2022 of RM49.6 million.”

Executive Director of Synergy House, Mr. Teh Yee Luen said, “As part of our expansion, we have allocated resources and funding to build up our brand name, reputation and reviews on e-commerce platforms. These includes more aggressive advertisement and promotions on the e-commerce platforms that we market on which will bear fruits in the longer term. We see huge potential in the global e-commerce furniture market and we are consistently sowing the seeds for future B2C growth.”

Synergy House is raising RM34.4 million through the issuance of 80.0 million new shares at an IPO price of RM0.43 per share which is expected to support the Group’s future growth and expansion plans.

For the financial years ended 31 December (FY) 2019, FY 2020, FY 2021 and FY 2022, the Group registered revenue of RM111.5 million, RM122.9 million, RM184.3 million and RM194.1 million respectively. In particular, Synergy House’s B2C segment has seen encouraging growth, with sales reaching RM49.6 million in FY2022 from RM1.99 million in FY2019 at a compound annual growth rate of 192.17%.

Kenanga Investment Bank Berhad is the Principal Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.

Synergy House Bhd: https://www.synergyhouseberhad.com/

Synergy House Launches IPO Prospectus

Targets to raise RM34.4 million from the IPO
Plans to grow B2C sales through expanding to more e-commerce platforms in new markets

Synergy House Berhad, a cross-border e-commerce seller and furniture exporter of ready-to-assemble (RTA) home furniture, launched the prospectus for its initial public offering (IPO) today in conjunction with its upcoming listing on the ACE Market of Bursa Malaysia Securities Berhad.

Mr. Alvin Ooi Yet Ming, Acting Head of Corporate Finance, Kenanga Investment Bank Berhad; Datuk Roslan Hj Tik, Executive Director, Head Group Investment Banking & Islamic Banking, Kenanga Investment Bank Berhad; Mr. Mok Juan Chek, Independent Non-Executive Chairman, Synergy House Berhad; Mr. Tan Eu Tah, Non-Independet Executive Director, Synergy House Berhad; and Mr. Teh Yee Luen, Non-Independent Executive Director, Synergy House Berhad [L-R]

The IPO will raise RM34.4 million via the issuance of 130.0 million new shares at an IPO price of RM0.43 per share which is expected to support the Group’s future growth and expansion plans. The IPO proceeds raised will be used by the Group in the following manner:

RM10.0 million or 29.07% for purchasing of inventories for the Group’s proposed e-commerce fulfilment centre in Muar, Johor and e-commerce fulfilment centres in overseas countries;
RM1.5 million or 4.36% to purchase racking system and forklifts for the Group’s proposed e-commerce fulfilment centre in Muar, Johor;
RM1.0 million or 2.91% for e-commerce advertisement and promotions;
RM10.0 million or 29.07% to repay borrowings;
RM7.7 million or 22.38% for working capital purposes; and
RM4.2 million or 12.21% for listing expenses.

Executive Director of Synergy House, Mr. Tan Eu Tah said, “Given that global demand for furniture e-commerce is expected to continue to grow, our IPO will enable us to fuel our future growth and expansion plans by tapping into the equity capital market for future fund raising. Our IPO will also provide us with the financial flexibility to pursue growth opportunities as and when they arise. The recognition gained through our listing status will also enhance our reputation in the marketing of our products and services, retention of employees, expansion of customer base as well as attract new employees.”

Executive Director of Synergy House, Mr. Teh Yee Luen said, “Leveraging on e-commerce has been another transforming experience for our Group as it has enabled us to have direct contact with end-consumers and thus enabling us to gather first-hand information and insights on consumer preferences that are valuable for product development. We intend to continue to grow our business-to-consumer (B2C) segment by utilising a portion of the IPO proceeds to purchase inventories for our B2C segment and by carrying out advertising and promotion initiatives on third-party e-commerce platforms. We also plan to grow our B2C sales through expanding to more e-commerce platforms in new markets.”

For the financial years ended 31 December (FY) 2019, FY 2020, FY 2021 and FY 2022, the Group registered revenue of RM111.5 million, RM122.9 million, RM184.3 million and RM194.1 million respectively. In particular, the Group have seen encouraging growth from its B2C segment whereby its B2C sales have increased from RM1.99 million in the FY 2019 to RM49.63 million in FY 2022 at a compound annual growth rate of 192.17%.

Kenanga Investment Bank Berhad is the Principal Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.

Synergy House Berhad will list on the ACE Market of Bursa Malaysia on 1st of June 2023.

Synergy House Bhd: https://www.synergyhouseberhad.com/

Synergy House Berhad Obtains Approval for ACE Market Listing, Engages Kenanga IB as Underwriter

Synergy House Berhad’s IPO will comprise an IPO of 130.0 million shares comprising a public issue of 80.0 million new shares and offer for sale of 50.0 million existing shares
Kenanga IB will manage the underwriting of 37.5 million shares comprising 25.0 million new shares allocated for the public and 12.5 million existing shares allocated for eligible persons

SYNERGY HOUSE BERHAD, a cross-border e-commerce seller and furniture exporter of ready-to-assemble (RTA) home furniture, has entered into an underwriting agreement with Kenanga Investment Bank Berhad (Kenanga IB) for the Group’s upcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia Securities Berhad.

Executive Director of Synergy House Berhad Teh Yee Luen and Tan Eu Tah; Executive Director, Head of Group Investment Banking and Islamic Banking of Kenanga Investment Bank Berhad Datuk Roslan Hj Tik, and Acting Head of Corporate Finance of Kenanga Investment Bank Berhad Alvin Ooi [L-R]

Prior to entering into the agreement, the Group had earlier obtained the approval from Bursa Securities for admission to the Official List as well as the listing of its shares on the ACE Market of Bursa Securities.

In conjunction with its listing, Synergy’s IPO exercise will comprise a total of 130.0 million shares including a public issue of 80.0 million new shares representing 16.0% of the enlarged issued share capital. The IPO shares from the public issue will be allocated in the following manner:

1. 25.0 million shares representing 5.0% of the enlarged issued share capital to be allocated via balloting to the Malaysian public;
2. 12.5 million shares representing 2.5% of the enlarged issued share capital to be allocated to eligible directors, employees and persons who have contributed to the Group (“Eligible Persons”);
3. 30.0 million shares representing 6.0% of the enlarged issued shares to be allocated to selected investors by way of private placement; and
4. 12.5 million shares representing 2.5% of the enlarged issued shares capital to be allocated to Bumiputera investors approved by the Ministry of International Trade and Industry (“MITI”).

The IPO exercise also includes an offer for sale of 50.0 million existing shares representing 10.0% of the enlarged issued share capital which will be made available by way of private placement to Bumiputera investors approved by the MITI.

Under the underwriting agreement, Kenanga IB will underwrite the 25.0 million new shares made available to the Malaysian public and the 12.5 million existing shares made available to Eligible Persons.

Executive Director of Synergy House, Mr. Tan Eu Tah said, “The signing of the underwriting agreement marks an important milestone for us as it brings us one step closer towards being a listed company. We would like to extend our gratitude to Bursa Securities for granting the approval for our listing. We are also pleased to have Kenanga IB on board as our Principal Adviser, Sponsor, Underwriter and Placement Agent. Our IPO will provide us the capital to grow our business which business model we have adopted since 2004. Since 2004, we have focused solely on the design, development and sales of RTA home furniture and outsource all manufacturing works to third party manufacturers.”

Executive Director of Synergy House, Mr. Teh Yee Luen said, “The funds raised via the IPO will enable us to continue to grow our business-to-consumer (“B2C”) segment which we started in 2012. Our sales from our B2C segment have increased from RM1.99 million in the financial year ended (“FYE”) 31 December 2019 to RM24.78 million in FYE 31 December 2021 at a compound annual growth rate of 252.88%. In tandem with our strategy to continue growing our B2C segment, part of our IPO proceeds will be used to purchase inventories for our B2C segment as well as for the implementation of e-commerce advertising and promotion strategies.

Executive Director, Head of Group Investment Banking and Islamic Banking of Kenanga IB, Datuk Roslan Hj Tik said, “We would like to thank Synergy House for having us onboard for the Group’s IPO exercise. The Group’s decision to focus solely on design, development and sales of RTA home furniture has been pivotal for its growth. We believe that the Group will be able to continue to leverage its design and development capabilities to further expand its business through the listing. Our best wishes to the Group on this new journey and we look forward to supporting Synergy House in its future endeavours.”

Synergy House Bhd: https://www.synergyhouseberhad.com/