Big Caring valued at an 11% premium ahead of listing, MBSB expects faster growth
Ahead of its listing on the Main Market, Big Caring Group Bhd was valued at RM1.20 per share by MBSB Research, putting it 11.1% above its initial public offering (IPO) retail offer price of RM1.08. The valuation reflects expectations that the pharmacy chain will deliver stronger earnings growth than other consumer retailers in Malaysia.
Highlights
- Big Caring valued at an 11% premium, with a fair value of RM1.20 per share based on 24 times forecast FY2028 earnings, compared with the sector average of 21 times.
- Big Caring is expected to increase core net profit by 37.3% to RM293.6 million in FY2027, rising to RM368.7 million in FY2028 and RM433.9 million in FY2029.
- MBSB Research expects Big Caring's earnings per share to grow three times faster than retail sector peers, driven by its dominance in the pharmacy market.
This article was translated from the original. Read the original version by our correspondent here.
Valuation basis and earnings forecasts
According to The Edge Malaysia, in an unrated IPO note, MBSB Research said Big Caring merits a higher valuation than other Malaysian consumer retailers, supported by its dominant position in the local pharmacy market and a business model that extends beyond standalone retail outlets.The fair value of RM1.20 per share is based on 24 times forecast earnings for the financial year ending 30 June 2028, compared with the average of 21 times for Malaysian consumer retail stocks. However, the valuation remains below that of 99 Speed Mart Retail Holdings Bhd, which trades at 29.5 times forecast 2028 earnings, according to the research firm.
MBSB Research said Big Caring offers the first listed exposure to the shift in pharmaceutical and healthcare spending towards organised pharmacy chains, with an estimated one-quarter share of that market. The firm also believes the valuation premium is supported by the scarcity of comparable options in the market and lower exposure to competition from Chinese e-commerce platforms in prescription drug sales.
MBSB Research expects Big Caring's core net profit to rise 37.3% to RM293.6 million in FY2027, from RM213.8 million in FY2026, before increasing further to RM368.7 million in FY2028 and RM433.9 million in FY2029. The firm also forecasts the group's earnings per share to grow about three times faster than peers in the retail sector.
In our earlier coverage of Big Caring Group Bhd's retail underwriting agreement ahead of its IPO on Bursa Malaysia's Main Market, we outlined the offering structure of up to 1.9 billion shares and the role of several investment banks in the listing process. The article also highlighted the group's growth trajectory, including pharmacy network expansion, plans to strengthen its online and offline operations, and projections for significant increases in revenue and profit in recent years.
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