International Housewares Retail bares expansion plan

It includes acquisition targets in Singapore.

The management of International Housewares Retail recently discussed its expansion strategy during an NDR held by Maybank Kim Eng.

According to a research note from Maybank Kim Eng, the expansion strategy includes searching for JV partners in the area that it currently does not have a presence (i.e. Indonesia, Thailand and Taiwan).

Also, it includes actively searching for acquisition targets in Singapore. Lastly, it involves management conservatively expanding its product offerings and store format in HK from traditional housewares to non-household products.

Here’s more from Maybank Kim Eng:

For example, it is reaching out to wet markets with its new "Happy Kitchen" brand and has signed a MOU with a potential non-household partner.

In terms of its store expansion plan, IHR aims to achieve stable growth in HK with 15 new stores opening each year.

In Singapore, it targets to open another 50 stores in the coming two years and boost its store count to 100.

Management sees a huge opportunity to gain share from the 1,000+ mum-and-pop stores in a fragmented market.

Investors are mostly interested in knowing the exit strategy of the PE fund, EQT. Some see uncertainties within the share structure change as a stock overhang while some view the exit of EQT as a great opportunity which will improve overall trading liquidity.

Per our previous discussion with EQT, it believes IHR is a very successful investment and still sees a lot of potential in store efficiency improvement and international expansion.