Future Plans for Growth:

  • Opening of New Stores.

Eco-Shop intends to expand its retail network by opening 70 new stores across Malaysia, targeting underpenetrated regions in the dollar store segment. Stores will be strategically located in neighbourhood hubs, busy roads, shopping malls, and shopping districts, with most stores sized between 4,000 sq. ft. and 10,000 sq. ft; aimed at strengthening brand presence and capturing growth opportunities nationwide.

  • Distribution Centre Expansion Plan.

To support the anticipated growth in store numbers and storage needs, Eco-Shop will part finance the acquisition of a 307,560 sq. m. freehold industrial land in Klang, Selangor, for the development of a semi-automated distribution centre; aimed at enhancing operational efficiency and is targeted for completion by FYE 31 May 2027.

  • IT Hardware and Software Investment.

The Group will allocate RM1.0 million to upgrade IT systems over three years, focusing on enhancing ERP, HRM, and WMS platforms, introducing CRM and transport systems, and strengthening cybersecurity infrastructure; aimed at improving efficiency, automating operations, and securing enterprise data to support its next phase of digital growth.

M+ Fair Value

We ascribe a fair value of RM1.40 for Eco-Shop. Our fair value is derived by pegging a forward P/E of 35.0x to the FY26f EPS of 3.99 sen, implying a 23.9% upside from its IPO price of RM1.13. We believe the assigned P/E of 35.0x is justified, as the average P/E and forward P/E of its closest peers range between 25.5-39.4x. The valuation also reflects Eco-Shop’s strong business moat, evidenced by its SSSG performance.