PETALING JAYA: Many companies which held back their initial public offerings (IPOs) last year are going for listing on Bursa Malaysia this year.
“This year, there are more listings but among them, some deals were rescheduled from last year due to changes in the proposals or market sentiments,” MIDF Research said.
To date, four companies have successfully listed on the Main Market, raising funds up to RM627mil compared with RM1.09bil raised from rights issues.
In the pipeline, three companies were scheduled for Main Market listing while six were going for Ace Market listing.
The three companies eyeing for Main Market status include process control equipment and measurement instruments distributor Dancomech Holdings Bhd, property firm Eco World International Bhd as well as quarry operator and raw material supplier Spring Energy Resources Bhd.
Meanwhile, the firms targeting to list on the Ace Market included healthcare furniture and equipment manufacturer LKL International Bhd, commercial laundry and medical device distributor BCM Alliance Bhd, public transport services provider Perak Transit Bhd, glove-dipping lines manufacturer HLT Global Bhd, electronic components maker Salutica Bhd and project management services provider HSS Engineers Bhd.
“Sizes of IPOs are getting smaller. For instance, there are six companies planning for Ace Market listing this year compared to four last year.
“Three Ace Market firms were listed in 2014 and one in 2013,” the research house said, adding that some of the smaller companies listed since 2015 were well-received as seen from high oversubscription rates and share price performance.
“That’s partly due to the limited number of shares offered to the public on top of other factors such as the industry they’re in or their business models.”
Last year showed a wider mix of construction, technology, consumer, industrial products, utility, transport and manufacturing counters. “One year on, there are more manufacturers and distributors from various industries that target to get listed this year,” MIDF Research said.
It added that valuation wise, they varied according to their respective sectors and company prospects, with most of their historical price-to-earnings ratio ranging in the teens based on IPO price.
Upcoming IPOs were expected to be priced at realistic levels so that a good balance was struck between demand and valuation.
“Stocks that are reasonably valued at IPO price also tend to see higher upside after the listing,” MIDF Research said.
Notably, nine out of the 15 companies listed since 2015 have seen at least double-digit growth in their share prices from their IPO prices, showing sustainable healthy interest drawn from investors.
“Retail investors seem to favour penny stocks as share prices of these counters saw sharper movement on their debuts. A couple of them sustain the interest with double-digit performance to-date while some thematic plays such as technology stocks saw periodical interest before they gave up some gains,” it said.
On the other hand, construction stocks were still favoured by investors such as Sunway Construction and Ikhmas Jaya as they showed robust performance due to their strong orderbook coverage and the sanguine sentiment for the sector as well as steady contract flow for the year.
Unchanged counters such as food and beverage special-purpose acquisition company Red Sena recorded a double-digit dip among all the listings since 2015.