Will MSTGOLF 5316 MST GOLF GROUP BERHAD IPO hit a hole-in-one?
There is probably much excitement over the imminent listing of MST Golf Group Bhd.
The gold equipment retailer is the only golf specialist to be listed ont he Main Market of Bursa Malaysia and this should attract a slew of investors.
As the company embarks on a golf retail footprint and product offerings across the region, particularly in Indonesia, Thailand and Vietnam, it would need fresh funds to do so.
Currently, it is the market leader with more than 52% of market share in Malaysia, and is the largest specialised retailer of golf equipment in Malaysia and Singapore.
MST Golf derives almost 80% of its revenue from retail sales and the remaining from wholesale, golf-related services and indoor golf services segments.
As more new players are coming to the game, rounds played on a roll, equipment sales setting a historic pace, investors may think what could go wrong, right?
Problems of longer waits for items and across-the-board price increases are already taking place.
This is due to rising costs of manufacturing and distributing products in the current COVID-19 environment that has led to shortages, frustration and uncertainties.
The difficulties of the COVID-19 pandemic have led to significant shutdowns in the shaft and grip component part of the industry.
Factories that make everything from titanium driver heads to cabretta leather golf gloves in China, Taiwan, Malaysia and Vietnam have been shut down for several periods due to Covid.
But even without factory shutdowns or raw material shortages, shipping costs and delays have provided their own headaches.
Some golf companies have seen container costs increase tenfold at one point.
This has hurt some of the golf’s premier publicly traded companies, Callaway and Acushnet, which repeatedly mentioned supply chain challenges on earnings calls.
For MST Golf, its range of golf clubs, golf balls and accessories, and golf apparel are mainly imported goods.
As a result of its reliance on imports of finished goods, it is exposed to the risk of foreign exchange fluctuations.
About 63% to 75% of its total purchases of input materials and services were transacted in foreign currencies, mainly USD.
These imported goods are mainly for our retail and wholesale operations in Malaysia and Singapore where all the sales transacted through our retail operations in Malaysia are in RM.
While the sales transacted through our retail operations in Singapore as well as exports of golf equipment to other foreign countries are mainly in SGD.
As such, any unfavourable and adverse changes in exchange rates between RM and foreign currencies such as SGD and USD would have a negative impact on its financial performance.
The recent depreciation of RM against foreign currencies have resulted in the increase in its product cost and would be challenging to pass on the higher cost to customers.
For the FYE 2019 and FYE 2020, MST Golf recorded net gains on foreign currency exchange while we recorded a net loss in FYE 2021 and FYE 2022.
As exciting as it sounds, these challenges including possible slowdown in demand could crimp sales and affects its bottomline.
Certainly, it would have to contend with rising competition be it offline or online golf equipment business.
But as it expands to other markets with increasing appetite for the elite game, MST Golf may indeed be in a sweet spot.
https://xifu.my/OpinionsComment.aspx?BID=B02463215PBAB0D2
Singapore Investment
-
-
-
-
-
-
-
-
How I Save More With Fave14 hours ago
-
Another SEA, halfway across the world14 hours ago
-
-
-
SBOCT24 GX24100H is 2.77%16 hours ago
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Gro Cash Sure: Honest Review3 days ago
-
-
-
-
-
-
-
-
-
-
Summary of August 20245 days ago
-
-
-
-
-
Month of August 20241 week ago
-
-
-
-
Buying after Black Monday1 week ago
-
-
-
Portfolio (Aug 30, 2024)1 week ago
-
-
-
-
-
-
-
-
-
-
-
-
What Makes Up Our Wealth?1 week ago
-
-
Youth Action Challenge Season 61 week ago
-
-
-
-
-
4 bank valuation facts you don’t know2 weeks ago
-
-
-
-
-
-
-
-
Will mortgage rates fall off a cliff?3 weeks ago
-
-
-
500k Milestone!3 weeks ago
-
Random thoughts: Air Drying of car3 weeks ago
-
-
Lentor Hills Residences4 weeks ago
-
-
-
-
A pullback or…?4 weeks ago
-
-
-
Jul 2024 Portfolio4 weeks ago
-
-
Few Reflections1 month ago
-
-
-
-
Be anti-fragile1 month ago
-
-
-
-
-
-
Monthly IBKR Update – June 20241 month ago
-
At the Half Year Mark2 months ago
-
-
-
-
2Q 2024 Investment Strategy Update2 months ago
-
Oh My Spins Casino Login App2 months ago
-
-
-
-
Free money again! Don't say #bojio.3 months ago
-
-
-
-
-
Breakthroughs in portfolio :)3 months ago
-
-
-
China’s going downhill?4 months ago
-
-
-
Feb 2024 Expenditure5 months ago
-
-
The Market Is A Scam!6 months ago
-
-
-
-
Options Trading Journal Jan 20246 months ago
-
-
-
-
Year 2023 DIYQuant Portfolio Performance Report8 months ago
-
Monthly Summary of November 20239 months ago
-
Migration of website9 months ago
-
-
-
-
-
-
-
-
-
-
-
-
A New Light1 year ago
-
-
-
-
-
-
2022 Thoughts, Hello 2023!1 year ago
-
Series of Defaults for Maple Finance1 year ago
-
Takeaways from “Sea Change”1 year ago
-
Greed is Coming Back1 year ago
-
-
-
-
-
-
-
-
-
-
-
What is Overemployment2 years ago
-
Terra Hill Condo (former Flynn Park)2 years ago
-
Alibaba VS Tencent: The Battle Royale2 years ago
-
-
-
-
-
-
-
-
-