MORNING CALL: 18/9/23

Mercury Securities likes SSF Home Group for its attractive expansion plans and strong market presence

Transcript

00:00 Quick look at Ace Marketbound's SSF Home Group today.

00:04 Mercury Securities is recommending Subscribe.

00:07 With a fair value of 38 cent, SSF is set to be listed at 25 cent apiece.

00:13 So why does Mercury like the stock?

00:16 For starters, it's got an extensive retail presence in the country with 41 retail outlets.

00:22 That enables it to tap into a broad customer base.

00:25 Its supply network comprising 28 entities, that's 19 local manufacturers, 1 local wholesaler,

00:32 7 local trading houses and 1 trading house in Hong Kong.

00:36 Mercury says this enhances SSF's adaptability and bargaining power during price negotiations

00:42 and contract discussions.

00:44 Its customer loyalty program is excellent, 82,997 active paid members in its SSF Home

00:52 VIP Membership Loyalty Program and they tend to return and recommend the brand to others.

00:57 SSF offers a wide array of furniture, home decor and home living products, serving a

01:03 diverse customer base.

01:05 It's also got high inventory levels, enabling it to optimise its supply chain and distribution

01:10 processes, resulting in cost savings.

01:13 According to the research house, the group currently has 0.4% share of the home furnishing

01:19 retail industry in Malaysia of RM46.93 billion in 2022, signifying potential room for growth.

01:27 At the moment, Mercury appears to be the only research house to have issued an IPO note

01:31 on SSF.

01:33 So that's one buy with a target price of 38 cent.

01:36 SSF will go public on the 12th of next month at 25 cent per share, so that implies a potential

01:42 upside of 52%.

01:44 [Music]