All eyes on Main Market listings

MAIN Market listings on Bursa Malaysia are always welcomed.

Despite the flurry of companies going public, few head to the Main Market due to their relatively small sizes.

After a lull, however, there were 11 Main Market entrants in 2024 and another seven have joined year-to-date.

Four more are expected before the year ends.

The advantage of Main Market listings is that their offerings are typically sizeable enough for institutional funds to accumulate meaningful positions.

ACE Market listings, by contrast, tend to be too small.

The problem is that Main Market initial public offerings (IPOs) generally do not perform well. That said, last year’s listings have generally been impressive.

Of the 11 companies that listed last year, only two remain below their offer price, while another has barely appreciated.

This year’s cohort has fared worse: share prices of five of the seven companies listed so far remain underwater.

So how will the upcoming Main Market listings do?

These are made up of those that have already launched their prospectuses as well as the big companies that have announced IPO plans.

Over the past few weeks, Geohan Corp Bhd, LAC Med Bhd, Orkim Bhd and Wasco Greenergy Bhd have issued their prospectuses, while Skyechip Bhd’s draft prospectus has just been released.

Sunway Healthcare Holdings Bhd and MMC Port Holdings Bhd are also en route to listing.

Big Caring Group Sdn Bhd is another name speculated to be heading for an IPO, which would be timely given that another major pharmacy chain, Apex Healthcare Bhd, is being taken private.

How will these companies’ shares perform once listed?

Much will depend on pricing. Geohan, LAC Med, Orkim and Wasco Greenergy will list at historical price-to-earnings (PE) multiples of 15.11 times, 14.7 times, 9.9 times and 12.8 times, respectively.

None of these suggest any ­outlandish valuations, ­probably the result of tempered expectations stemming from the poor performance of this year’s Main Market listings.

All eyes now turn to the ­valuations that Skyechip, Sunway Healthcare, MMC Port and Big Caring will seek.