Retail subscription to 3.47M shares of Nice One starts on TASI today

Logo of Nice One Co.

Retail investors began subscribing today, Dec. 24, to 3.47 million shares of Nice One Co. at SAR 35 per share, as determined through the book-building process.

The retail tranche accounts for 10% of the total offering, with the subscription running for two days until Dec. 25.

For More IPOs

In September, the Capital Market Authority (CMA) approved Nice One’s request to float 34.65 million shares, or 30% of the post-IPO capital, on the Main Market (TASI). The offering also represents 31.5% of the pre-IPO capital, with a nominal value per share of SAR 1.

The offering includes the sale of 25.24% of existing shares and the issuance of new shares, representing 4.76%, totaling 30% of the capital.

The institutional subscription ended last week, with the offering 139.4x oversubscribed.

Nice One’s IPO is the 14th this year, following listings by  Middle East Pharmaceutical Industries Co. (Avalon Pharma) on Jan. 30, Modern Mills for Food Products Co. on March 5, Miahona Co. and Dr. Soliman Abdulkader Fakeeh Hospital Co. (Fakeeh Care) on May 21, Saudi Manpower Solutions Co. (SMASCO) on May 26, Al Taiseer Group Talco Industrial Co. (TALCO) on May 28, Rasan Information Technology Co. on May 29, Almajed for Oud Co. on Sept. 15, Arabian Mills Co. on Sept. 18, Fourth Milling Co. (MC4) on Oct. 2, Tamkeen Human Resources Co. on Nov. 5, United International Holding Co. on Nov. 19, and  Almoosa Health Co. on Dec. 23.

Tadawul witnessed eight IPOs in 2023, including MBC Holding Group Ltd., Morabaha Marina and Mawarid Manpower Co., Jamjoom Pharmaceuticals Factory Co., First Milling Co., Lumi Rental Co., ADES Holding Co., and SAL Saudi Logistics Services Co.

Key Background

Nice One was founded by Omar AlOlayan as a sole proprietorship in 2017, based in Riyadh. It transitioned to a limited liability company in 2017, and later to a closed joint-stock company in May 2024.

The Nice One app and website were launched two years after working on market research and establishing the infrastructure.

The company's pre-IPO capital is SAR 110 million, divided into 110 million shares, with each share valued at SAR 1. The post-IPO capital will be SAR 115.5 million, divided into 115.5 million shares.

The company's main current activity is e-commerce for personal care products, perfumes, and cosmetics.

By the end of Q1 2024, the company had over 1,200 international and local brands on its platform, compared to nearly 500 international brands in 2021, along with several proprietary brands.

Over the past three years, the company has achieved more than 90% of its total sales through its own app, "Nice One."

Nice One currently relies on a centralized distribution model, where all products are distributed directly from the company's main warehouse in Riyadh via its own fleet. The company also collaborates with several logistics companies to serve its customers across all regions of the Kingdom.

The company's market share reached 8.6% in 2023. In the specialized online retail market for cosmetics and personal care products, it held a 29% market share.

Nice One offers a wide range of products, with over 26,000 product SKUs by the end of 2023. It processed nearly 2.9 million orders, sold 18 million units, and achieved an average of 300,000 unique visits daily.

The number of new customers increased from approximately 130,000 in Q1 2023 to about 206,000 in Q1 2024.

According to the prospectus, the company’s net profit in 2023 was nearly SAR 32.6 million, while the net profit for Q1 2024 was about SAR 22 million.

Nice One had 401 employees as of the end of March 2024, including 107 Saudi citizens, with a Saudization rate of 55%.

The board of directors is chaired by Amr AlJalal, with Abdulrahman AlOlayan serving as his deputy. Omar AlOlayan holds the position of CEO.

Nice One intends to use the net proceeds from the offering—if any—along with other financial sources such as cash flows and loans, to finance the working capital, develop and market the company’s proprietary brands and sales channels, as well as enhance logistical and technical capabilities.

Moreover, the company plans to use its financial sources for general corporate purposes, as outlined in the following table:

The following table outlines the expected timeline for the use of net proceeds from the offering:

Warehouses

The company leases a main warehouse, in which all products are prepared and packaged, supported by three additional warehouses, all located in the Riyadh area.

All orders are served from the company's main warehouse and distribution center.

The company is constructing a new, fully automated warehouse in Riyadh, which is expected to be larger than the company's existing warehouses, with a planned area of 14,500 square meters. Operations at this warehouse are expected to begin by the end of 2024.

The company also plans to expand into the Western Region by opening a warehouse in Jeddah to enable same-day delivery, achieving further growth in that region. The company already started renovation for this warehouse.

The following table outlines details of the company's current warehouses:

Company’s Revenue

According to the prospectus, Nice One’s revenues increased by 28% to nearly SAR 782.4 million in 2023, compared to SAR 613.6 million in 2022.

Income from the sales of goods amounted to 96% of total revenues for the year ending Dec. 31, 2023, while revenue from the sales of services accounted for 4%, as shown below:

Affiliates

Nice One established two subsidiaries in Egypt and the UAE, neither of which has started commercial operations yet. Their main activities are focused on retail sales of perfumes, cosmetics, and personal care products.

*Wholly owned by Namara Investments.