Small listings make for weak IPO market so far on local bourses

The Main Market has only one listing thus far, while the LEAP and ACE see 8 listings respectively


MALAYSIA’S initial public offering (IPO) market has had a poor year in terms of capital raised at RM870.4 million year-to-date (YTD) compared to RM9.7 billion in the same period last year.

The Main Market saw only one listing thus far, while the Leading Entrepreneur Accelerator Platform (LEAP) and Access, Certainty, Efficiency (ACE) Market saw eight listings respectively.

There were 14 companies listed on Bursa Malaysia in 2017.

Taking out those from the LEAP market, investors have profited as most of the new listings this year have seen their shares trade above their IPO prices.

A Solitary Main Market Listing

The Main Market on Bursa Malaysia welcomed five listings last year till end September. This year, Mi Equipment Holdings Bhd has been the sole main board listing.

The Penang-based equipment manufacturer of wafer level chip scale packaging sorting machines for the semiconductor industry saw its share price soaring over 107% in the period of four months due to the bullish tech sector.

Mi Equipment made its debut at RM1.42 apiece and now trades at RM2.94 with market capitalisation soaring over 98% higher than its maiden trading day.

The company was valued at RM770 million on June 20, 2018, and today it is valued at RM1.47 billion.

The stock rose 16% in the past month and trades at 24 times its estimated earnings per share for the coming year.

ACEd It!

The best IPO performer is cashless payment solutions provider, Revenue Group Bhd, whose share price has increased by 208% over its listing price of 37 sen.

Revenue Group now trades at RM1.14, almost doubled since its debut on July 17, 2018.

On its debut, Revenue Group rose 68% and its market capitalisation today stands at RM256.28 million.

Bloomberg data shows that Revenue Group trades at 32 times its estimated earnings per share for the coming year.

The second-best performing newly listed ACE Market company is QES Group Bhd, which is principally involved in the distribution of inspection, test and measurement equipment, materials and engineering solutions.

QES Group yesterday closed at 37 sen apiece, up 94% over its issue price of 19 sen.

Its public offer of 37.92 million new shares was oversubscribed by more than 19 times.

QES Group’s market cap has since appreciated close to 65% from RM166.82 million to RM276.78 million. In the past one month, the stock rose 38%.

Furniture exporter, Wegmas Holdings Bhd and retail technology solutions provider Radiant Globaltech Bhd have both appreciated over 30% since listed. Wegmas made its debut at 30.5 sen, a premium of 5.17% from the issue price of 29 sen.

Today, it trades at 38 sen apiece with a market cap of RM187 million, 28% higher than it was on March 6, 2018.

Radiant Globaltech currently trades at 29.5 sen apiece, compared to its debut of 23 sen on July 24, 2018.

Negative or Nothing

Nova Wellness Group Bhd and Binasat Communications Bhd are both now trading their respective debut prices on the ACE Market.

Nova Wellness’ share price is hovering around its offer price of 55 sen.

The first listing on Bursa Malaysia this year — Binasat Communications saw a premium of 19 sen, or 41.3%, on its debut, but has since eased to trade at its issue price of 46 sen apiece.

Binasat Communications’ market value has reduced by 24.58% over the last nine months to RM115.7 million now.

Investors in Tri-Mode System (M) Bhd and GDB Holdings Bhd have not fared that well.

Both companies recorded a negative return in its share price YTD.

Integrated logistics service provider, Tri-Mode System, made its debut on the ACE Market at a discount of 11 sen, or 18%, from its IPO price of 61 sen.

Yesterday, it closed 26% lower at 45 sen with a market value of RM75.5 million, 15% lower compared to five months ago.

Construction services firm GDB Holdings returned a negative 5% in its share price to close at 33 sen yesterday.

The stock fell 18% in the past month, and is 37% below the Bloomberg consensus one-year target price.