Shares of discount-chain Eco-Shop Marketing Bhd. gained on their debut on Friday as Malaysia’s biggest initial public offering of the year created a billionaire.
The stock jumped as much as 10.6% in early trading, before paring its advance. Eco-Shop, which sells household items at a fixed price of 2.60 ringgit ($0.60), raised 974 million ringgit in an offering that valued the company at about $1.5 billion. That’s the most since an IPO by 99 Speed Mart Retail Holdings Bhd. in September.
The time couldn’t have been better for Eco-Shop, according to chief executive officer Jessica Ng. “If you look at the current economic situation, our business model is even more needed. We stretch the ringgit for many, many people,” Ng said in a Bloomberg News interview.
Potential income growth for most of the population over the next two years would also ensure “a big catchment” and room to expand, she added. The dollar-store operator plans to use proceeds from the share sale to add 70 outlets per year for the next five years, essentially doubling its store count.
The debut is a positive sign for Malaysia’s market, whose momentum after the 55 IPOs it saw in 2024 was derailed by tariffs. Although Eco-Shop’s IPO shares were eventually priced lower, the listing shows there’s still traction for low-cost mass consumer brands among investors.
Founded by Lee Kar Whatt and his partners in 2003, Eco-Shop has grown to 350 stores across Malaysia. Lee—who will end up with a $1.15 billion stake post-listing, according to the Bloomberg Billionaires Index—still works out of the company’s headquarters in Jementah, a small town located in the southern state of Johor.
The company is looking to expand the portfolio of its in-house brands, which make up more than half of sales, to have better control over cost and quality. Ng said the group also has mechanisms in place that allow it to keep the cost of imported products at a minimum.
Eco-Shop, which sells everything from snacks to stationery and cleaning products, reported a 45% on-year increase in net profit to 61.7 million ringgit for the three months through February. Revenue jumped 17% to 736 million ringgit.
No doubt, competition has intensified in recent years, particularly from established rivals like Mr DIY Group (M) Bhd. and smaller upstarts run by entrepreneurs from mainland China. But Ng said Eco-Shop can carve out its own niche, given its 68% market share in the country’s discount-store sector.
Ng, who previously worked at multinationals, said Malaysian brands are generally “operationally good” and many of them have become “irreplaceable” due to the scale they have achieved in their respective categories. Resilient domestic demand will continue to help local chains like Eco-Shop thrive, she said.
This story was originally featured on Fortune.com