CIMB-backed brokerage eyes RM3b value from target IPO

CGS-CIMB’s ambitions come amid a surge in retail stock trading and as many companies remain eager to raise funds via IPOs globally, bolstered by vehicles such as SPACs that could fast-track the listing process

ONE of South-East Asia’s bigger brokerages, CGS-CIMB Securities International Pte Ltd, is targeting an IPO with a valuation of at least S$1 billion (RM3.08 billion) by 2025.

As part of the group’s strategy, it is considering listing in Hong Kong, Malaysia or Singapore, subject to shareholder approval, CEO Carol Fong said in an interview. The brokerage has started “preliminary studies” and the target valuation will depend on profits and market conditions, she said.

CGS-CIMB’s ambitions come amid a surge in retail stock trading and as many companies remain eager to raise funds via IPOs globally, bolstered by vehicles such as special purpose acquisition companies (SPACs) that could fast-track the listing process. Fong said the company may consider listing via a SPAC if the right opportunity comes along. A Singapore IPO “makes sense” given the firm’s South-East Asian focus, she added.

A joint venture between China Galaxy Securities Co Ltd (CGS) and CIMB Group Holdings Bhd, Singapore-headquartered CGS- CIMB’s businesses include retail broking, institutional equities and wealth management. The deal, announced in 2017, valued the 50% stake at S$167 million.

“The profits we generate right now should qualify us for listing all three marketplaces,” said Fong. According to the company, its total equities turnover value stood at S$263.1 billion in its 2020 fiscal year.

Here are more goals under its 2025 strategy:

With about 70% of the broker’s clients aged 40 and above, the firm wants to target younger investors, group head of strategy and analytics Saw Ping May said at the same interview. It introduced a millennial-targeted trading platform in Singapore last month that allows trading of equities, bonds and other asset classes on 30 exchanges.

This retail-focused ProsperUs platform aims to attract 10,000 investors in the next 12 months, according to a company statement.

It wants to increase assets under management for its private wealth arm to US$1 billion by 2025 from US$200 million.

The brokerage is seeking a presence in the Philippines and Vietnam “when appropriate”, Fong said. Besides Singapore, CGS-CIMB currently has offices in Malaysia, Thai- land and Indonesia. — Bloomberg