KUALA LUMPUR (Dec 5): Hypermarket operator TF Value-Mart (TF) may have recently changed owners, but they are keeping to its successful and simple formula of focusing on second-tier cities and remaining asset-light, The Edge Malaysia reports.

“Our focus has always been on tier-two towns and we will continue to focus on this,” said CEO Ho Mun Hao.

TF’s current owners came on board after a management buyout assisted by financing from Intermediate Capital Group plc (ICG). ICG also acquired a stake in the hypermarket operator through its Asia Fund IV.

ICG is an UK-listed alternative asset manager “focused on providing capital to help companies grow through private and public markets”.

“ICG has not set a time frame as to when it will exit. It is here for the long term.

“It has the dry powder to even execute mergers and acquisitions. It is hungry to make more investments here,” Ho told the weekly.

Chief financial officer Anthony Lee Teck Hoe reveals that being asset-light is one of TF’s strengths as it “does not own any of the assets” that it operates from. “They are all leases. We prefer to pump back the cash into the business,” he said.

After reporting a near 9% year-on-year growth in revenue to RM1.48 billion last year, the TF expects to end 2020 with an even bigger increase in revenue of 15% to RM1.7 billion.

“Remarkably, all of its stores have remained profitable this year and have been performing above expectations since the beginning of March,” wrote The Edge.

TF’s best-performing stores are in Pahang and Perak, 8 and 12 stores respectively. It has 37 stores nationwide, outnumbering AEON BiG and NSK but behind Tesco and Econsave.

Next year, TF plans to add another four stores -- two in Kedah and one in Perak have been confirmed “while a fourth site is in the works”.

“The retailer is also eyeing sites that other retailers are vacating but prefers to operate as a standalone store rather than be located inside a mall,” reported the business publication.

Read the full report in this week’s The Edge Malaysia

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