HomePro ventures into Malaysia

Home Product Centre Plc's plan to penetrate Malaysia is expected to be a boon to the company's bottom line, said Tisco Securities.

The board of directors recently approved the company to register a wholly-owned subsidiary in Malaysia. With a registered capital of 10 million ringgit or Bt10 million, Home Product Centre (Malaysia) will invest Bt500 million in the first outlet with 8,000 square metres in Kuala Lumpur. Intended to be the first one-stop household distribution centre in the country, the company hopes that the success of the first outlet will pave way for further expansion.

The expansion will be financed by working capital. At the end of the first quarter, it sat on cash of Bt1.8 billion, with the 0.8:1 debt to equity ratio.

Tisco Securities is positive of the outlook, though urbanisation rate in Malaysia at 66 per cent is higher than Thailand's 30 per cent.

The securities house expects Home Product Centre to post the net profit of Bt1.88 billion this year and Bt2.2 billion next year, without taking into account the results from new outlets. Home Product Centre is expected to open 5 new outlets each year, and each should boost the company's sale revenue and net profit by Bt630 million and Bt40 million, respectively.