This article first appeared in Capital, The Edge Malaysia Weekly on March 31, 2025 - April 6, 2025

MALAYSIA’s initial public offering (IPO) market kicked off the year on a high note, with new listings recording impressive performances on their debuts. However, the same can’t be said of those that listed on Bursa Malaysia this month.

The five companies that launched their IPOs this month saw their share prices close below their IPO prices on their market debuts amid weak investor sentiment. They include Saliran Group Bhd (KL:SALIRAN), which closed 22.2% lower at 21 sen compared with its IPO price of 27 sen on March 13. The ACE Market-listed oil and gas (O&G) pipe supplier, which was valued at 10.4 times price-earnings ratio (PER), is now trading at 8.9 times after the drop.

Pantech Global Bhd (KL:PGLOBAL), which debuted on March 3 on the Main Market of Bursa, ended its first day of trading at 57.5 sen, a 15.4% decline from its issue price of 68 sen. The pipe manufacturing company was initially valued at 12 times PER, but it is now trading at a PER of 9 times.

The share price of the three other companies — Chemlite Innovation Bhd (KL:CLITE), Lim Seong Hai Capital Bhd (KL:LSH) and Wawasan Dengkil Holdings Bhd (KL:DENGKIL) — experienced smaller declines of 8%, 5.7% and 8% respectively against their IPO prices on their maiden trading day.

Nevertheless, the stocks remain under selling pressure. Shares of Saliran, Pantech Global and Chemlite were still trading below their IPO prices as at last Thursday.

The downward pressure has spilled over to companies that were listed earlier. Shares of RichTech Digital Bhd (KL:RTECH), which made its debut on the ACE Market on Feb 17, closed at 20 sen last Thursday — 20% below its IPO price of 25 sen — while ACE Market-listed Techstore Bhd (KL:TECHSTORE), which debuted on Feb 18, settled at 18.5 sen, 7.5% below its offer price of 20 sen.

As at March 27, a total of 13 companies had been listed on Bursa this year. Of these, seven that debuted in January and February ended their first day of trading above their IPO prices, achieving an average gain of 33%.

The five companies that listed in March ended their first trading day below their IPO prices, with an average loss of 11.86%. This makes March the worst month for IPO listings so far.

According to Rakuten Trade head of equity sales Vincent Lau, external headwinds such as uncertainty over the US’ tariff policy and the constraints on supply of Nvidia chips have dampened the overall market sentiment.

“While some level of concern is understandable, there is no need for excessive worry as this trend also affects other regional markets. This is evident in the net outflows observed across various markets,” he tells The Edge.

Lau cites Thailand’s stock market, which saw a net outflow of US$248.6 million (RM1.1 billion) in the week ended March 14. Meanwhile, the selling streak on Bursa continued for the 22nd consecutive week, with a net outflow of RM1.25 billion as at March 21.

The persistent foreign outflow continues to weigh on regional markets, contributing to a decline in key indices. The benchmark FBM KLCI has fallen by 6.49%, while Thailand’s SET index is down by 15.16% year to date.

Lau expects Malaysia’s IPO market to recover by “April or May, once things settle down, such as the completion of tariff negotiations”.

“Companies listing from May onwards should see more stable share price performance [on their maiden trading day],” he says, adding that the IPO pipeline remains healthy. Bursa is targeting 60 IPOs this year, averaging one per week, along with active IPO prospectus launches.

The upcoming new listings include Sumisaujana Group Bhd (KL:SUMI) on April 9, MSB Global Group Bhd (KL:MSB) on April 15 and Cuckoo International (MAL) Bhd (KL:CKI) on April 30.

Areca Capital Sdn Bhd CEO Danny Wong Teck Meng also observes that there is a healthy IPO pipeline, noting that recent IPOs were submitted for approval six to 12 months ago when market conditions were significantly stronger.

He says weak sentiment and risk-off results have led to lower valuations for IPO listings. “This trend is evident in this year’s listings, where most companies now have a lower PER compared with their IPO valuation.”

Specifically, nine out of the 13 companies listed so far this year have a lower PER based on their closing price last Thursday, compared to their IPO PER.

“As the market remains fragile, IPOs are expected to align with market sentiment,” says Wong.

While he did not specify a timeline for a recovery in sentiment, he suggests that it could happen once the market “gets used” to US President Donald Trump’s policies.

Since the start of 2024, a total of 68 companies — four on the Leap Market, which are not covered here — have gone public. Of these, 10 closed below their IPO prices on their maiden trading day. Three ended their first trading day unchanged from their IPO prices, while the remaining 51 witnessed an impressive surge.

As at March 27, 2025, 26 companies had recorded a decline in their share prices since their debuts. One company remained flat, showing no change from its IPO price. The remaining 37 companies had posted share price gains since listing.

Many IPOs that recorded strong first-day gains, such as Ocean Fresh Bhd (KL:OFB), Kucingko Bhd (KL:KUCINGKO) and Agricore CS Holdings Bhd (KL:AGRICOR) — averaging a 113.33% increase on their debut — have since seen their share prices fall. As at March 27, their share prices had recorded an average loss of 19.69% from their IPO prices.

The largest IPO in seven years, 99 Speed Mart Retail Holdings Bhd (KL:99SMART), has not been spared the recent selling pressure. Its share price has declined from the peak of RM2.63 on Dec 6, 2024, to close at RM2.10 last Thursday. At this price, the mini-market operator is trading at a PER of 35.96 times compared with its IPO valuation of 34.7 times, based on its IPO price of RM1.65.

99 Speed Mart saw its net profit increase 16.8% to RM124.42 million in the fourth quarter ended Dec 31, 2024 (4QFY2024) from RM106.54 million a year ago. Its earnings per share (EPS) rose 16.5% to 1.48 sen from 1.27 sen in 4QFY2023 while revenue grew 7.3% year on year (y-o-y) to RM2.58 billion from RM2.41 billion.

For the full year ended Dec 31, 2024 (FY2024), 99 Speed Mart’s net profit rose 22.5% to RM490.27 million from RM400.227 million in the previous year. Its EPS increased 22.7% to 5.84 sen from 4.76 sen in FY2023. Revenue also grew 8.3% y-o-y to RM9.98 billion.

However, 99 Speed Mart’s PER has remained almost flat due to weak market sentiment, which has suppressed valuations despite its solid earnings growth and revenue expansion. A six-month moratorium was imposed on its founder Lee Thiam Wah and his wife Ng Lee Tieng, who collectively own an 83% stake. The lock-up period ended on March 9, following which 99 Speed Mart’s share price dipped to as low as RM1.95 on March 11. However, the stock had rebounded to RM2.10 last Thursday.

Automotive parts supplier KHPT Holdings Bhd (KL:KHB), which posted a net loss of RM1.88 million for the quarter ended Dec 31, 2024, has seen its share price decline 40% since its IPO debut on Oct 8, 2024. This makes it one of the worst-performing IPOs since 2024.

A 12-month moratorium has been imposed on the group’s managing director Datin Eloise See Hui Pvng and its substantial shareholder, Ivy See Hui Shi. Under this restriction, they must hold 59.27% of the group’s shares for the first six months and at least a 45% stake for the following six months. The first moratorium is set to end on April 8.

Although Wentel Engineering Holdings Bhd (KL:WENTEL) achieved a 113.5% jump in net profit for the quarter ended Dec 31, 2024, its share price had increased only 3.9% from its IPO price of 26 sen to close at 27 sen last Thursday. This comes after a decline from its peak of 41.5 sen.

A 12-month moratorium was imposed on major shareholder Wong Kim Fatt, his spouse Loo Sok Ching and the company’s non-independent non-executive chairman, Ban Kim Wah, requiring them to collectively retain a 67.48% stake until Aug 6, 2024. Following this, a second moratorium mandated them to hold at least 45% of the company’s shares for an additional six months ended Feb 6, 2025. After the initial moratorium expired on Aug 6, 2024, Wentel’s share price peaked at 36.5 sen but it has since been on a declining trend, settling at 27 sen last Thursday. 

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