ValueMax set to be first pawnbroker on SGX mainboard

ValueMax is set to become the first pawnshop chain here to be listed on the Singapore Exchange's mainboard, after launching an initial public offering (IPO) on Monday at 51 cents a share.

The company's possible plans include a move to open a flagship store catering to customers who pawn items worth over $50,000.

"There will be private rooms in this new store which will give the customers more privacy and security," said executive director Yeah Lee Ching on Monday.

The company is issuing 138 million new shares to raise net proceeds of about $66.3 million for expanding the business, and to raise funds for the loans issued to customers.

Of the new shares, five million are for retail investors with the remaining 133 million set aside as placement shares.

The new shares will represent about 25.9 per cent of the enlarged share capital. The founding Yeah family will retain ownership of the remaining 74.1 per cent.

The ValueMax brand was launched by Ms Yeah's father, managing director and chief executive Yeah Hiang Nam, 65, in 2004. It was part of his drive to give pawnshops a more modern feel, akin to a jewellery store.

He first entered the pawnbroking industry in 1988, when he set up Ban Soon Pawnshop with several partners.

All but one of its 17 outlets in Singapore also offer the retail and trading services of pre-owned jewellery and gold.

Ms Yeah, 41, said ValueMax's strengths include its experienced management team and staff as well as its proprietary software and data management system.

She and her brother Steven, 34, are certified gemologists. They are being groomed to take ValueMax's business forward.

The pawnbroking sector here has been growing as shown by the number of pledged articles rising from 2.7 million in 2007 to four million last year, according to data from the Yearbook of Statistics Singapore 2013, cited in the IPO prospectus.

Two others chains, Maxi-Cash Financial Services and MoneyMax Financial Services, made their trading debuts on the Catalist board in the last 18 months.

"Most of our customers are aged between 25 and 64," said Ms Yeah, adding that there is a growing acceptance of the trade as a convenient, cheaper way of getting fast cash.

As part of the IPO offering, the directors are proposing dividends of 50 per cent of net profit for the three financial years up to 2015.

ValueMax's net profit grew 11.2 per cent to $14.3 million from 2010 until last year, on the back of a 27.8 per cent rise in revenue to $509 million.

The IPO is open till noon next Monday. Trading is expected to commence next Wednesday at 9am.

rjscully@sph.com.sg

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