Southeast Asia IPO market Southeast Asian bourses show strong performance in 2018 even as companies in region look beyond their local shores 2018 Report Brochure / report title goes here | Section title goes here
Southeast Asia IPO market 03 Vietnam’s IPO market in 2018 09 Singapore’s IPO market in 2018 11 Contact us 18
02 Southeast Asia IPO market
Southeast Asia IPO market
Southeast Asia performance Capital markets across Southeast Asia have performed relatively well in 2018, compared to the past five years, with a record high market capitalisation ofS$62.2 billion, having produced 152 initial public offerings (IPOs) and raisingS$12.5 billion of funds.
IPO Market Capitalisation by country 45,000 2014 2015 2016 2017 2018 )
s 40,000 n o i
l 35,000 l i
M 30,000 $ S (
p 25,000 a C
t 20,000 e k r
a 15,000 M
O 10,000 P I 5,000
0 Indonesia Malaysia Philippines Singapore Thailand Vietnam ota 2014 5,153 6,736 2,167 15,303 11,998 1,207
2015 6,357 4,561 559 1,888 8,470 1,297
2016 5,950 1,285 5,479 4,396 6,237 2,324
2017 4,434 5,569 3,415 8,470 18,429 5,243
2018 8,107 918 1,042 2,883 7,887 41,368
The IPO market capitalisation in Southeast Asia increased by 36.5% from 2017’s S$45.6 billion to 2018’s S$62.2 billion. Vietnam produced the highest IPO market capitalisation of S$41.4 billion in 2018, accounting for 67% of the total IPO market capitalisation for the region in 2018. )
Amount raised, market capitalisation and number of IPOs 2014 - 2018 s n o i
200 70,000 l l 178 62,205 i
180 M 60,000 $ S ( 160 154 152
149 p a
50,000 C
s 140 t e O 45,560 k P
I 113 120 42,564 r
f 40,000 a o M
100 r O e P b 30,000 80 I / m
25,671 d u e N 60 s
23,132 20,000 i a
12,511 r
40 9,269 t 13,466 10,000 n
20 u
7,525 o
5,312 0 m
0 A 2014 2015 2016 2017 2018 ota No of IPOs 149 154 113 178 152 Amt Raised 9,269 5,312 7,525 13,466 12,511 Market Cap 42,564 23,132 25,671 45,560 62,205
No of IPOs Amt Raised Market Cap
03 Southeast Asia IPO market
Vietnam emerges as top performer in Southeast Asia with largest funds raised in 2018
Amount raised by country 2014-2018
7,000
6,000 )
s 2014 2015 2016 2017 2018 n o i l
l 5,000 i M $ S ( 4,000 d e s i s a
r 3,000
t n u o
m 2,000 A
1,000
0 Indonesia Malaysia Philippines Singapore Thailand Vietnam ota 2014 964 1,779 425 3,451 2,515 135 2015 1,166 1,128 157 512 2,085 264 2016 1,264 377 1,277 2,263 2,078 266 2017 1,399 2,362 654 4,661 3,971 419 2018 1,697 251 208 730 3,402 6,223
This performance was led by Vietnam, followed by Thailand, which respectively accounted for 50% and 27% of total funds raised in 2018.
Vietnam In Vietnam, the IPO capital market raised a total of S$6.2 billion in 2018 alone, far exceeding the funds raised in the past years. This was due to several factors including the Vietnam government’s privatisation drive and market reforms, strong interest from foreign investors and local funds, as well as the high GDP growth of 6.8% in 2018. Many large SOEs were being divested, especially in the energy and resources industry, which contributed significantly to the high amount of funds raised.
“With the Vietnam Finance Ministry proposing to remove the 49% foreign ownership cap for listed companies, and the stock exchange streamlining the listing and IPO process, we can expect the Vietnam IPO market to continue to do well in the next few years.” – Ms Tay Hwee Ling, Global IFRS & Offerings Services Leader, Deloitte Southeast Asia and Singapore
Thailand Even amid stagnating economic growth mid-year, Thailand still managed to come in second with S$3.4 billion worth of funds raised, maintaining its strong IPO performance trend from the past 4 years. The Thai property market has been strengthening, with demand for residential property growing. This can also be seen with the real estate sector being one of the main contributors to capital raised via IPOs for Thailand.
Indonesia Indonesia was the third best performer with S$1.7 billion worth of funds raised from a total of 57 IPOs in 2018, the highest number of IPOs in the region. This is surprising to many especially with Indonesia facing stagnating economic growth the past 5 years, a weak rupiah and poor global and local investors’ demand due to global uncertainty. The increase could also be an indicator that IDX’s efforts to encourage IPOs in the local bourse has paid off. The financial services industry was the main contributor to funds raised through IPOs in Indonesia, with the sector raising S$416 million with only 9 IPOs.
04 Southeast Asia IPO market
Top 3 IPOs
The top three blockbuster listings in Southeast Asia for 2018 came from Vietnam and Thailand:
S/N Country of Company name Date of IPO market Amount Industry listing listing cap (S$’bil) raised (S$’bil)
Vietnam Vinhomes Joint Stock Company 7 May 2018 14.5 3.6 Real Estate
Thailand Thailand Future Fund 31 Oct 2018 1.9 1.8 Financial Services
Vietnam Vietnam Technological and 22 May 2018 8.8 1.2 Financial Commercial Joint Stock Bank Services
i homes oi t Sto k om a S raised S i io on the HCM Stock Exchange. It is the residential property developer of conglomerate Vingroup JSC VIC.HM, which operates in real estate, education, healthcare, entertainment, retailing and automobile manufacturing sectors. Drawing strong interest from global and local funds, it is the country’s biggest-ever IPO in a market. As the dominant player in the high-end property segment in Hanoi and Ho Chi Minh City, it has Singapore s GIC as a pre-IPO investor with 7% stake of US$853 million.
hai a uture u I raised S i io . As an iet am e h o o i a a infrastructure fund launched by ommer ia oi t Sto k a k the government, it invests 45% e h om a k , one of the of toll revenue of the leading commercial banks in Expressway Authority of Vietnam, raised S i io . Thailand on two expressways, With more than 5.4 million totalling 83.2km, over 30 years. customers in Vietnam, it is one Proceeds from the fund’s IPO of Vietnam’s largest private will be used to finance sector banks and one of the construction of another two leading banks in Asia. expressways projected to be in a range between 4.75% and 5.3% in the first year.
05 Southeast Asia IPO market
IPOs by industry
2018 IPOs by Industry
70 61 5,000 4,655 4,500 60 s 4,000 O
P 50 3,761 I 3,500
f
2,352 (S$Millions)
o 3,000 d
40 e r
2,500 s e
25 i b 30 2,000 a r m
t
u 15 20 14 12 13 1,500 n N
1,093 8 1,000 u
10 4 o 500 467 m 0 119 0 A 42 22
Real Estate Public Sector Health Care Financial Services Life Sciences and Consumer Business Industrial Products Energy and Resources Technology,Telecommunications Media and
No. of IPOs Amount raised
2014-2018 IPOs by industry
16,971 ) 250 18,000 s 216 n o 16,000 i l l s 200 i
O 14,000 M P $ I
12,000 S f ( 132 107 o 150 d 10,221 10,000 r e e s
99 i b 8,094 8,000
100 r a m
u 54 56 50 6,000 t n N 4,663 32 3,199 4,000 u 50 3,070 o
1,373 2,000 m A 0 492 0
Real Estate Public Sector Health Care Financial Services Life Sciences and Consumer Business Industrial Products Energy and Resources Technology,Telecommunications Media and
No. of IPOs Amount raised
The increase in amount raised for Financial Services in 2018 was largely due to the 2 blockbuster listings: Thailand Future Fund and Vietnam Technological and Commercial Joint Stock Bank. Both listings raised a total of S$3 billion worth of funds, 80% of the amount raised by the entire industry in the region for 2018.
There was a 30% growth in amount raised by Real Estate IPOs in 2018. Of the S$4.66 billion raised by Real Estate in 2018, 77% is attributed to Vietnam’s top listing Vinhomes Joint Stock Company.
Top count Highest amount raised 216 IPOs from the Consumer Business sector from 2014 - S$17 billion raised by IPOs from the Real Estate sector 2018, of which Vietnam had a total of 80 Consumer Business over the past 5 years. Singapore’s Real Estate IPOs have the sector IPOs in the last 5 years. The Consumer Business highest cumulative capital of S$6.2 billion raised, largely sector in the region has been seeing a steep increase in the due to high value Real Estate sector IPOs in 2016 and 2017. number of IPOs in the past 2 years. This is likely due to the The Real Estate sector is expected to continue in its positive rapid growth in consumer demand in the ASEAN region and trend, with Thailand’s increasing residential construction a burgeoning middle-income group due to more recent pro- activity and land prices, and the Philippines government’s growth policies and projects by governments in big infrastructure projects to spur economic the region. growth.
06 Southeast Asia IPO market
Funds raised by Southeast Asian companies on foreign exchanges from 2014 to 2018
London Stock Exchange (LSE) S$221m Hong Kong Exchange (HKEx) Taiwan Stock Exchanges* S$3,187m S$97m
Australian Securities Exchange (ASE) S$74m *This pertains to 2 exchanges: Taipei Stock Exchange (TPEX) and Taiwan Stock Exchange (TWSE) which had raised S$67m and S$30m respectively from 2014 – 2018.
Companies in the region have more options and are “Traditionally, companies tend to list in the increasingly exploring overseas listing countries where they do their business in, which On top of their own local exchanges, companies in the region are looking overseas. In the past five years from 2014 to 2018, Southeast is typically their home country where they have Asian companies raised a total of S$3.6 billion on overseas established their brand locally. However, the exchanges, indicating that companies in the region are open to tide appears to be shifting, and companies are explore their options outside of their country to raise funds. looking for opportunities in overseas exchanges.
The most popular exchange outside of the region is Hong Kong, There are several reasons for this shift, for where S$3.2 billion was raised by Southeast Asian companies over the last five years. However, the average cross-border IPO funds example, companies may feel that they want to raised in 2018 is lower than the average funds raised by companies raise capital in markets they hope to expand in their domestic exchanges within Southeast Asia. into, or they lack confidence in their local markets’ ability to help them raise the funds they require to grow. This is where local bourses need to step up their game and educate their local companies on the benefits of listing locally.”
– Tay Hwee Ling, Global IFRS and Offerings Services Leader, Deloitte Southeast Asia and Singapore
07 Southeast Asia IPO market
Outlook for Southeast Asia IPO market
We can expect a volatile year ahead with a string of international factors expected to drive fluctuations, including global trade disputes and U.S.-China trade barriers, the outcome of Brexit, the rising interest rates courtesy of the U.S. Federal Reserve and other central banks, as well as the GDP growth in the region.
However, there continues to be a pipeline of IPO hopefuls and liquidity in the capital markets. While investors generally gravitate toward more “recession-proof” and commodity-focused sectors, such as energy and resources, and materials and utilities, we believe that technology and health care will also offer opportunities for investors in 2019, barring unforeseen circumstances.
Malaysia: 4.7%* The Philippines: 6.4%* Vietnam: 6.8%* Malaysia’s growth is fueled by exports The Philippines’ economic growth was Vietnam’s growth is primarily seen in especially in palm oil and liquefied natural driven by investment in manufacturing the services and industry-construction gas (LNG). The services sector is another and technology constructions, exports sectors. In addition, exports and Foreign key driver for the growth fueled by as well as government expenditure in Direct Investment (FDI) are key drivers for wholesale & retail trade, and information infrastructure and industrial projects. Vietnam’s expanding economy growth. & communication. On the expenditure side, private consumption also contributed to the growth. However, the cancellation of several infrastructure projects and slowing export growth have also caused a slowdown in growth.
Singapore: 3.2%* Thailand: 4.1%* Indonesia: 5.2%* The manufacturing sector remained Thailand’s economy expanded due to the Indonesia’s economy was lifted by strong a strong pillar of support especially in exports and tourism sectors. Notably, the investment in machine, equipment and domestic electronics production due to government’s infrastructure investment vehicles. Furthermore, stronger domestic the global tech cycle. Other segments programme is expected to spur growth in demand was expected compared to the such as pharmaceutical, wholesale & retail the services sector and economic growth previous year. trade, as well as finance & insurance, all for Thailand. recorded accelerated year-on-year growth.
China USA EU Japan Hong Kong Australia
China: United States: Europe: Japan: Hong Kong: Australia: 6.5%* 2.9%* 1.9%* 0.8%* 2.9%* 2.8%*
*Extracted from these sources: Malaysia, Philippines, Vietnam, Thailand, Indonesia, China, Japan, Europe and US GDP forecast for 2018: http://www.worldbank.org/en/publication/global-economic-prospects#data SG GDP Forecast 2018: http://www.mas.gov.sg (Economy policy group: Survey of professional forecasters) HK and Australia GDP Forecast 2018: https://tradingeconomics.com/hong-kong/forecast and https://tradingeconomics.com/australia/forecast
08 Southeast Asia IPO market
Vietnam’s IPO market in 2018
Vietnam is currently Southeast Asia’s hottest capital market, having produced the highest IPO market capitalisation and in IPO amount raised in 2018.
Vietnam saw 33 listings in 2018, with the amount of funds raised totalling S$6.2 billion, more than 14-fold increase from 2017’s S$419 million. The total IPO market capitalisation was S$5.2 billion in 2017 in Vietnam, which increased by almost eight times to S$41.4 billion in 2018. This includes Vinhomes Joint Stock Company (“JSC”) and Vietnam Technological and Commercial Joint Stock Bank (“TechComBank”) which raised S$3.6 billion and S$1.2 billion respectively, making up 58% and 20% of the total funds raised for Vietnam in 2018.
iet am IPO er orma e i
7,000 45,000 41,368 40,000 6,000 35,000 5,000 6,223 30,000 4,000 25,000
3,000 20,000 15,000 2,000 Amount Raised (S$Millions) 10,000 IPO Market Cap (S$Millions) 5,243 1,000 2,324 5,000 1,207 264 1,297 135 266 419 0 0
IPO amount raised IPO Market Capitalisation
iet am s stro er orma e i a e attri ute to the o o i reaso s
6.8%
Vietnam government’s ambitious The capital market was Strong interest from foreign privatisation drive and market reform underpinned by the solid GDP investors and local funds that will plans. This will continue to push IPO growth of 6.8% in 2018. continue to drive listing activities activities. in 2019.
09 Southeast Asia IPO market
Top 10 IPOs in Vietnam in 2018
No Company Listing date Sector Market Cap Amount raised (S$’mil) (S$’mil)
1 Vinhomes JSC 7-May-18 Real estate 14,482 3,607
2 Vietnam Technological and Commercial Joint Stock 22-May-18 Financial 8,754 1,233 Bank Services
3 PetroVietnam Power Corporation 31-Jan-18 Energy and 2,017 403 Resources
4 Binh Son Refining and Petrochemical Company 17-Jan-18 Energy and 4,119 321 Limited Resources
5 PetroVietnam Oil Corporation 25-Jan-18 Energy and 1,204 241 Resources
6 Yeah1 Group Corporation 19-Jun-18 Consumer 407 116 Business
7 Vietnam Rubber Group Limited 2-Feb-18 Consumer 3,032 76 Business
8 Vietnam Southern Food Corporation 14-Mar-18 Consumer 290 67 – JSC Business
9 Hanoi Trade Joint Stock Corporation 30-Mar-18 Consumer 163 56 Business
10 Bình Dương Production and Trading Goods 28-Mar-18 Consumer 301 30 Corportation Business
Total 34,769 6,150
Future Developments in the Vietnam Capital Market
We can expect the strong performance to continue with the following plans by the Vietnam government to further develop the capital market:
Attracting more overseas In an effort by the finance ministry to upgrade Vietnamese stocks to the MSCI Emerging capital to the local market Markets Index, Vietnam has proposed to remove the 49% foreign ownership cap in listed companies as part of the new securities law framework.
Streamlining the IPO and The new law also proposes that companies could go ahead with listing after the listing process to become completion of the initial public offering process. This change is significant given that listing only one process, similar to and IPO are different processes in Vietnam. Under the current regulations, businesses international practice have to list within one year after the IPO.
The new law is expected to be approved by the end of 2019, and take effect in 2020.
10 Southeast Asia IPO market
Singapore’s IPO market in 2018
Singapore’s capital market experienced a slowdown in 2018, compared to 2017 Singapore saw 15 listings in 2018, with the amount of funds raised totalling S$730 million, an 84% fall from 2017’s S$4.7 billion. This includes two company IPOs and one trust on SGX Mainboard with S$134 million and S$422 million funds raised respectively. On the Catalist board, 12 deals raised S$174 million.
Singapore IPO performance in 2014 – 2018 4,500 18,000 4,090
4,000 16,000 15,303
3,500 14,000
3,000 12,000
2,500 2,355 10,000 8,470 1,921 2,000 8,000 Amount Raised (S$Millions) IPO Market Cap (S$Millions) 1,500 6,000
4,396 1,000 4,000 1,888 790 2,883 422 500 273 2,000 306 276 237 235 298 106 134 174 - - 2014 2015 2016 2017 2018
Amount Raised - Mainboard Amount Raised - Mainboard - Trusts Amount Raised - Catalist IPO Market Cap
Average amount raised by country of operations Foreign-based assets 80 800 have a dominant presence on the SGX, 700 70 which is evidently a preferred international 600 60 market for listing. In the past five years, foreign 500 50 companies listed on the
400 40 SGX from developed countries such as 30 Australia, Europe, United 300 Number of IPOs States of America, and 200 20 Japan and in recent
Amount raised for IPO (S$Millions) years, China, typically 100 10 raised between 2.5 to 7 times more funds when - 0 compared to Singapore Asia Australia China Europe Southeast Singapore Japan United counterparts. Asia States
Average Amount Raised Number of IPOs 11 Southeast Asia IPO market
Singapore IPOs in 2018
No Company Mainboard Date of Amount Price IPO IPO Current Share Industry Country of / Catalist listing Raised Earning Market Offer Price Price % Operations (S$’mil) Ratio Cap Price (31-Dec-18) change (S$’mil)
1 LY Corporation Catalist 31-Jan-18 19.72 7.7 127.18 0.26 0.25 -4% Consumer Business Malaysia Limited 2 ayondo Ltd. Catalist 26-Mar-18 21 NA 130.69 0.26 0.072 -72% Financial Services Europe 3 Sasseur REIT Mainboard - 28-Mar-18 421.6 NA 1,340.22 0.8 0.65 -19% Real Estate China Trust 4 SLB Development Catalist 20-Apr-18 54.74 9.79 209.99 0.23 0.168 -27% Real Estate Singapore Ltd. 5 Asian Healthcare Catalist 20-Apr-18 10.79 127.8 66.7 0.23 0.26 13% Life Sciences and Singapore Specialists Limited Health Care 6 Hyphens Pharma Catalist 18-May-18 15.6 10.4 78 0.26 0.195 -25% Life Sciences and Singapore International Health Care Limited 7 Jawala Inc. Catalist 1-Jun-18 4.5 42.6 29.62 0.25 0.178 -29% Energy and Malaysia Resources 8 PropNex Limited Mainboard 2-Jul-18 60.13 12.3 240.5 0.65 0.48 -26% Real Estate Singapore 9 Koufu Group Mainboard 18-Jul-18 74.35 13 349.75 0.63 0.615 -2% Consumer Business Singapore Limited 10 DLF Holdings Catalist 25-Jul-18 4.26 8.3 27.86 0.23 0.158 -31% Consumer Business Singapore Limited 11 Synagie Corporation Catalist 8-Aug-18 11.61 NA 70.66 0.27 0.16 -41% Consumer Business Singapore Ltd 12 Vividthree Holdings Catalist 25-Sep-18 12.95 24.51 83.5 0.25 0.192 -23% Technology, Singapore Ltd. Media and Telecommunications 13 MeGroup Ltd. Catalist 31-Oct-18 3.8 7.93 27.26 0.23 0.205 -11% Consumer Business Malaysia 14 Medinex Limited Catalist 7-Dec-18 7.5 25 32.8 0.25 0.27 8% Life Sciences and Singapore Health Care 15 Biolidics Limited Catalist 19-Dec-18 7.7 NA 67.9 0.28 0.22 -21% Life Sciences and Singapore Health Care Total count: 15 2018 Total 730.25 2,882.63 Average -21% Total count: 20 2017 Total 4,660.94 8,470.11 Average 35% Total count: 16 2016 Total 2,262.82 4,395.80 Average 15%
No. of Amount IPO Market The Singapore stock market saw a plunge in 2018. The 2018 IPOs share IPOs. Raised (S$mil) Cap (S$mil) price performance is in line with the fall in STI of -11%, with two major sell- Mainboard Trusts 1 421.60 1,340.22 offs on Wall Street in February and October 2018, arising from increasing Companies 2 134.47 590.25 interest rates in the US, the China-US trade war and the International Catalist 12 174.16 952.16 Monetary Fund (IMF) warning of global financial stability risks. The property Total 15 730.23 2,882.63 cooling measures by the Singapore government added to the negative impact on the stock market.
The largest IPO in 2018 - Largest funds raised by Sasseur REIT from China at S$422m Worst Performer - ayondo did badly likely due to the poor financial performance for Q2 2018 and the high risks arising from its nature of business Best Performer - Health care stocks tend to outperform other IPOs and we can expect more IPOs from these industries Total foreign listings from 5 IPOs (LY Corporation Limited, Ayondo Ltd, Sasseur REIT, Jawal Inc and MeGroup Ltd.) accounted for 64% of total funds raised
There were 2 lodgements on Catalist as at 31 December 2018: 1. Grand Venture Technology Limited (lodgement date 14 December 2018 and subsequently listed on 23 January 2019 at IPO price of S$0.275 and raised S$13.2 million with market capitalisation of S$64.4 million) 2. Sim Leisure Group Ltd (lodgement date 27 December 2018) 12 Southeast Asia IPO market
In 2018, 40% of the IPOs listed on SGX had market capitalisations of above S$100 million each, of which half were Singapore-based companies.
Aside from the only REIT listing, the top 3 in terms of funds raised are from Singapore companies: Koufu Group Ltd (S$74m), SLB Development Ltd (S$55m) and PropNex Ltd ($60m). The outlook for local companies is still positive.
Singapore companies that listed on the SGX had higher funds raised and profitability than those listed overseas The most popular exchange outside of the region is Hong Kong, where S$2.96 billion was raised by Singapore companies over the last five years. However, the average cross-border IPO funds raised in 2018 is lower than the average funds raised by companies in their domestic exchanges within Southeast Asia.
No Company Mainboard Date of Amount Price Latest Industry Country of / Catalist listing Raised Earning profit Operations (S$’mil) Ratio (S$’mil)
1 SLB Development Ltd Catalist 20-Apr-18 54.74 9.79 19.28 Real Estate Singapore
2 Asian Healthcare Catalist 20-Apr-18 10.79 127.8 0.44 Life Sciences Singapore Specialists Limited and Health Care
3 Hyphens Pharma Catalist 18-May-18 15.6 10.4 6.09 Life Sciences Singapore International Limited and Health Care
4 PropNex Limited Mainboard 2-Jul-18 60.13 12.3 18.89 Real Estate Singapore
5 Koufu Group Limited Mainboard 18-Jul-18 74.35 13 26.82 Consumer Singapore Business
6 DLF Holdings Limited Catalist 25-Jul-18 4.26 8.3 3.37 Consumer Singapore Business
7 Synagie Corporation Ltd Catalist 8-Aug-18 11.61 NA -3.38 Consumer Singapore Business
8 Vividthree Holdings Ltd Catalist 25-Sep-18 12.95 24.51 2.71 Consumer Singapore Business
9 Medinex Limited Catalist 7-Dec-18 7.5 25 0.95 Life Sciences Singapore and Health Care
10 Biolidics Limited Catalist 19-Dec-18 7.7 NA -7.21 Life Sciences Singapore and Health Care
Average 25.96 6.80
In 2018, the average funds raised by Singapore Most Singapore companies that companies listed in Hong Kong was S$18 million chose to list on SGX are profitable. per IPO, while the average funds raised by Singapore companies listed on the SGX was S$26 million per IPO.
13 Southeast Asia IPO market
What industries do we expect to see in future IPOs? Real Estate IPOs 2018
No Company Name Amount raised (S$’m) 1 Sasseur REIT 421.60 The Real Estate listings 2 SLB Development Ltd 54.74 accounted for 65% of total Total 476.34 amount raised on SGX in 2018. Total amt raised in 2018 730.23
The sector consist of companies from pharmaceuticals, health care providers, and health care equipment and supplies. As of 2018, the health care sector has seen a total of 32 companies, 2 REITs and 1 Trust.
Healthcare IPOs from 2014 to 2018
No Company Name Date of listing Amount raised Offer price Share price % change (S$’mil) (S$) (31-Dec-18) 1 TalkMed Group Limited 30-Jan-14 21.03 0.2 0.58 190% 2 QT Vascular Ltd. 29-Apr-14 55 0.28 0.007 -98% 3 ISEC Healthcare Ltd. 28-Oct-14 19.6 0.28 0.255 -9% 4 UG Healthcare Corporation Limited 8-Dec-14 6.19 0.22 0.215 -2% 5 Singapore O&G Ltd. 4-Jun-15 10.9 0.25 1.4 460% 6 iX Biopharma Ltd. 22-Jul-15 30.13 0.46 0.17 -63% 7 HC Surgical Specialists Limited 3-Nov-16 8.1 0.27 0.6 122% 8 Aoxin Q & M Dental Group Limited 26-Apr-17 11.4 0.2 0.22 10% 9 Clearbridge Health Limited 18-Dec-17 24.64 0.28 0.167 -40% 10 Asian Healthcare Specialists Limited 20-Apr-18 10.79 0.23 0.26 13% 11 Hyphens Pharma International Limited 18-May-18 15.6 0.26 0.195 -25% 12 Medinex Limited 7-Dec-18 7.5 0.25 0.27 8% 13 Biolidics Limited 19-Dec-18 7.7 0.28 0.22 -21%
Total 228.58 Average 42%
From 2014 to 2018, there have been 13 health care companies IPOs, performing at an average 42% share price (above water).
The F&B sector continues to experience exceptional growth. This can be attributed to several factors such as changing consumer demographics, rise in disposable income and growth of retail and distribution network.
F&B IPOs from 2014 to 2018
No Company Name Date of listing PE at IPO IPO Market Cap (S$’mil) Amount raised (S$’mil) 1 Jumbo Group Limited 9-Nov-15 8.6 160.33 40.08 2 Katrina Group Ltd. 26-Jul-16 9.6 48.62 7.52 3 No Signboard Holdings Ltd. 30-Nov-17 13.9 129.47 35 4 Kimly Limited 20-Mar-17 12.02 288.7 43.45 5 RE&S Holdings Limited 22-Nov-17 11.6 77.88 11.88 6 Koufu Group Limited 18-Jul-18 13 349.75 74.35 Average 11.45 175.79 35.38
In the same period, six F&B companies listed had an average price earnings ratio at IPO of 11.45, with sizeable funds raised and market capitalisation.
14 Southeast Asia IPO market
Developments in the Singapore capital markets in 2018
SGX developments Impact
1 On 11 January 2018, there was a proposal to remove quarterly ––Attracts more companies to list. reporting and if retained, SGX proposed to relax requirements ––Relatively less costly for small companies. for companies with smaller market capitalisation by: ––Provides a breather for small and mid-cap companies and ––Increasing market capitalisation threshold from S$75m to allows them to redirect human resources to other firm S$150m (i.e. only 38% of companies listed on SGX will have activities. to do quarterly reporting); or ––Adding an ownership condition to have at least one However, controlling shareholder holding a minimum 15% to a S$150m ––Protection of minority shareholders is a concern as they may threshold. receive less information.
As at 31 December 2018, this is still in the proposal stage.
2 Companies with dual-class shares (DCS) structures are able to ––Strikes a balance between supporting high-growth seek primary listing on SGX starting from 26 June 2018. companies and having safeguards to mitigate governance risks. ––Broadens the range of investment options for investors and adds vibrancy to SG’s capital markets.
3 On 9 November 2018, the Singapore Exchange Regulation ––Protects interests of minority shareholders. (SGX RegCo) issued a Consultation Paper on Proposed Amendments to Voluntary Delisting Regime.
SGX RegCo proposes to disallow offerors and parties acting in concert from voting on voluntary delistings; and the approval threshold required for the voluntary delisting to proceed be amended to a majority of 50% from 75% shareholders.
4 In early November 2018, SGX signed 2 Memorandums ––Fosters greater collaboration in developing Singapore’s of Understanding (MOU) with Zhejiang Entrepreneurs capital market opportunities for China enterprises. Association (ZJEA) and China Futures Association (CFA).
5 CapBridge 1Exchange gets MAS nod to operate as one of ––It provides private companies the ability to trade in their Singapore’s first private securities exchanges simplified securities by leveraging technology to create simple, regulated, and cost-effective liquidity options Another playing field has come about with Singapore’s first for both private companies and investors. This presents private securities exchange 1Exchange launched in November another option for regional and global companies to raise 2018. Strategic collaboration with CapBridge sees Deloitte being capital. the first to offer professional services solutions to clients of newly launched Private Exchange “1X”.
6 SGX signed a new strategic cooperation agreement with China- ––Supports Chongqing in catalysing business opportunities Singapore (Chongqing) Demostration Initiative on Strategic under CCI. Connectivity (CCI) Administration Bureau on 8 January 2019. ––Builds on existing partnerships between SGX and State- Owned Assets Supervision and Administration Commission (SASAC) and Financial Affairs Office (FAO) to help companies access international capital funding for business expansion.
15 Southeast Asia IPO market
Grant for Equity Market Singapore (GEMS)
The Monetary Authority of Singapore (MAS) announced that a Grant for Equity Market Singapore (GEMS) will be introduced in early 2019. One of the components is the listing grant which will aid enterprises that wish to list on SGX, including foreign enterprises. This listing grant, with its different funding tiers, would certainly be one of the factors that will be considered and utilised by eligible candidates across a range of sectors to list on SGX. This grant can, at the very least, help to defray the initial listing fees on the SGX. Listing related expenses include underwriting, placement, audit, legal, research and SGX listing fees.
ra t or uit arket Si a ore S
IPO market capitalisation > $300m
Companies in New tech sector: new tech Consumer Digital Technologies sector Financial Technologies 70% of qualifying Gaming Services & Peripherals costs, up to $1m On-Demand Services
Companies in High growth sectors: high growth Advanced Manufacturing sectors Digital Cluster 20% of qualifying Healthcare costs, up to $500k Hub Services ogistics Urban Solutions & Infrastructure
All sectors
20% of qualifying costs, up to $200k
Note: With effect from 14 Feb 2019, valid for 3 years Qualifying costs pertain to: 1. Singapore-based professional fees 2. All underwriting placement fees if >50% of such fees are attributable to Singapore-based entities
16 Southeast Asia IPO market
Key Highlights for Singapore IPO market in 2018
Overseas SGX exchange $$
Is our local exchange past our Are we still attractive What industries do we peak compared to other bourses? to foreign issuers? expect to see in future IPOs?
In 2018, Singapore companies that listed on the Yes. The highest funds raised Health care and F&B stocks SGX had higher funds raised and profitability was by Sasseur REIT from China tend to outperform other IPOs than Singapore companies that listed overseas. at S$422 million. The total and we can expect more IPOs The average amount raised by each Singapore foreign listings from 5 IPOs from these sectors. company listed in Hong Kong was S$18 million accounted for 64% of the total as compared to S$26 million on SGX. funds raised.
Singapore’s reputation of being politically stable with strong governance and having a solid G-to-B collaboration culture with the government supporting Singapore businesses through various grants and incentives, such as the latest Grant for Equity Market Singapore (GEMS) has helped make the listing environment in Singapore a positive one.
What is the outlook for 2019?
Depending on the stability of the global economy, we can expect the IPOs that have been delayed in 2018 to seek listing in the first quarter of 2019, and potentially some IPOs from the REITs and also from the healthcare and F&B sectors. 2019 will see increased vibrancy in the markets when some of SGX’s initiatives in 2018 come to fruition, including the anticipation of the first dual class shares listing since the announcement earlier this year
Tay Hwee Ling, Global IFRS and Offerings Services Leader, Deloitte Southeast Asia and Singapore
17 Southeast Asia IPO market
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