KUALA LUMPUR: MTT Shipping and Logistics Bhd slipped below its initial public offering (IPO) price on its market debut, turning underwater after an initially firm start.
The counter opened at RM1.08, above its IPO price of RM1.03, with an opening volume of 12.9 million shares. It hit an early high of RM1.08 and a low of RM1.04 within minutes of trading before ending the session with an intraday low of 99.5 sen.
The company’s listing gave it a market capitalisation of RM2.6bil and a price-to-earnings multiple of 10.3 times based on its financial year ended Dec 31, 2024 (FY24) earnings.
The group’s public issue was oversubscribed by nearly three times, while the institutional tranche was fully taken up.
MTT Shipping’s listing marks the largest logistics IPO on Bursa Malaysia since 2013, when AirAsia X Bhd
raised RM987.7mil and Westports Holdings Bhd raised RM2.03bil.
Commenting on the higher opening price, MTT Shipping and Logistics managing director Ooi Lean Hin said price fluctuations are common for companies when they are listed and that the group is not focused on it.
“Our fundamentals are very strong. We ended FY25 with a solid net profit of RM323.46mil, so the financials are there.
“We are in this for the long term. The stock may not look so sexy, but it is a good one,” he told the media following the group’s listing yesterday.
MTT Shipping is mainly involved in container liner shipping services, vessel chartering, container storage, and other related services, with operations spanning key regional markets including Brunei, China, India, Indonesia, Thailand and Singapore.
On the broader outlook, Ooi said while rising oil prices stemming from the US-Iran war could dampen demand in the longer term, the group is not directly exposed to the Middle East.
He added tighter global shipping capacity has supported charter rates, with some renewals seeing increases of more than 10%, while higher fuel costs are passed onto customers through the bunker adjustment factor mechanism.
“The war has reduced effective shipping capacity. Before the conflict, the market was already very tight but now it has made it even tighter, as there are many ships that are still stuck in the Gulf.
“As such, charter rates are moving up. So far, our volumes remain relatively strong. Our ships are still full. There is a little bit of port congestion here and there. But otherwise, it is still business as usual,” Ooi said.
MTT Shipping’s IPO raised RM652.5mil and there was no offer for sale. The bulk of the proceeds or RM624.7mil is earmarked for the acquisition of new container vessels.
Ooi said the foundation of the group’s expansion of its container liner shipping operation lies in the deployment of additional container vessels to widen and extend its footprint within and beyond the South-East Asia region and the Indian subcontinent within the next three years, and possibly the South of China region in the longer term, as well as to capitalise on the demand for new vessels for charter.
MTT Shipping aims to purchase at least 12 container vessels of varying capacities. The group said the funding for the acquisition of these vessels will be by way of a combination of internally generated funds, bank borrowings, proceeds from the sukuk wakalah as well as the proceeds from its IPO.
The company holds the largest market share at 46% among domestic container liner shipping operators in terms of cabotage volume from Peninsular Malaysia to Sabah and Sarawak, and Brunei in 2025. MTT Shipping closed two sen lower yesterday at RM1.01 from its IPO price of RM1.03.
