Courts Asia IPO - The familiar furniture + electronics MEGAMALL!

Which company do you think of when you hear the word "furniture"?

For me... it's Courts, then Furniture mall, Vhive etc...

What about "Home electronics"?

For me... it's Courts, then Harvey Norman, Best Denki, Gain City etc...

We seldom hear of a familiar Household Brand Name IPO but here it is... THE

Details of IPO

i) Listing Price: $0.77 per share
ii) Courts is offering 178 million shares, of which 60 million are new shares.
iii) 4 cornerstone investors - JF Asset Management Ltd, New Silk Road Investment Pte Ltd, Target Asset Management Pte Ltd and Value Partners Hong Kong Ltd - which have taken up 44 percent of the IPO.

Details of Courts Asia Limited

Gauging on how they will be utilizing the proceeds (not fixing on the % of net profit they plan to give out as dividends); they are embarking on a growth path and aiming towards the Indonesia market.

Personally, i think that it will bode well for Courts for 2 reasons:
1) There is no major player in the Indonesia market (under-penetrated market) 
2) It has a large fast growing middle class => more demand for electrical, IT and furniture products

Courts Competitive Landscape

Courts operate in only 2 countries so far, Singapore and Malaysia. And surprisingly, they have provided the competitive landscape due to Euromonitor...

It's quite an interesting read... but i was tempted to go buy Challenger and Senheng instead due to the CAGR (Compounded Annual Growth Rate) though...
But i have to say Courts is doing not bad as opposed to other firms...

Courts Financial Statements

A few points to note:
  • Sales & Net Profit growing slowly but steadily
  • however, Net profit margin at only roughly 5.5%
  • EPS of 7.03 (after ipo) & Price of $0.77 signify => P/E ratio of 10.95
  • Trade Receivables & Payables at a significant Premium over Net Profit, and with their retained earnings only a mere $5m, they must utilize the IPO profits carefully. (A strong step = big risks)


If you would ask me, i think that Courts IPO is not bad... think of Maxi-cash IPO (ipo price debut at $0.35, now it's $0.44 range). More importantly, it has the Brand X factor in which many retail investors will likely rope in...

Especially when many investors now have the cash but are held back from investing in properties due to the new increased downpayment for private properties.

Nevertheless, remember to do your own research using the prospectus!

Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!


  1. so far only Pertama (Harvey Norman), Isetan and probably Parkson Retail are profitable and in cash position.

    Tangs is in a loss making position, also delisted.

    Harvey Norman, has already been suspended, after failing in its delisting. although they are still declaring about 2 cts dividends in coming AGM.

    HN model, after taking over Pertama, is like a Mega landlord, each departments are mini tenants, taking care of its P&L, that is why, it is so profitable and in net cash position.

    It is the business model and strategy that makes the difference.

  2. Now this concept sound like something from the united states.