KUALA LUMPUR (May 14): Dubbed Malaysia’s largest listing exercise in seven months, Cuckoo International (MAL) Bhd is expected to revise its initial public offering (IPO) price lower to RM1.10 per share for both retail and institutional investors, down from the RM1.29 per share set previously, according to sources.

“The IPO price (for Cuckoo International) will likely be reduced from RM1.29 to around RM1.10, or possibly lower,” a source told The Edge.

If materialised, this would mark the second downward IPO price revision after Eco-Shop Marketing Bhd’s announcement last Friday to cut its offer price by 6.6% to RM1.13 per share. Eco-Shop saw an overall retail oversubscription of 0.96 times for 114.94 million shares allocated to Malaysian retailers.

Cuckoo International had originally planned to debut on the Main Market of Bursa Malaysia on April 30. However, the listing has been postponed to June 24 amid heightened global market volatility, driven by uncertainties surrounding potential US tariff actions. As a result, the closing date for its retail and institutional offerings has been extended from April 10 to June 5.

A fund manager said there had been a lukewarm response to Cuckoo International’s IPO.

“So they either had to make it more attractive or defer it (the listing),” he said.

“In recent months, we’ve seen many IPOs trading below their offer prices, with attractive valuations and low PE (price-earnings) ratios,” he added.

Despite the price cut, the source said Cuckoo International — the Malaysian arm of South Korean home appliance giant Cuckoo Homesys Co Ltd (CKH) — would maintain its public issuance of 143.28 million shares.

At the potential revised price of RM1.10, the IPO is expected to raise gross proceeds of RM157.61 million, down from the RM184.83 million projected in the earlier prospectus — representing a shortfall of RM27.22 million.

As such, the company would see lower allocation for product procurement to support the expansion of its rental business, repayment of bank borrowings, capital expenditure for new 'Brandshops', IT system upgrades and regional expansion into Singapore.

Cuckoo International’s market capitalisation is also set to decline to RM1.58 billion upon listing, compared with RM1.85 billion based on the original IPO price.

Similarly, this would value the company at approximately 18.06 times in trailing PE ratio — based on a net profit of RM87.3 million for the financial year ended Dec 31, 2023 (FY2023), against 21.2 times for the IPO price of RM1.29 per share.  

According to its prospectus filed in March, Cuckoo International’s cornerstone investors include Albizia Capital Pte Ltd, Areca Capital Sdn Bhd, Fujiare Global Sdn Bhd executive director Datuk Lim Boon Siong, Lee Swee Kiat & Sons Sdn Bhd, Schonfeld Global Master Fund LP and Schonfeld IR Master Fund Pte Ltd.

Cuckoo International’s largest shareholder, CKH currently holds a 62.5% stake in the company, which will be diluted to 52% post-IPO.

Cuckoo International’s non-independent non-executive chairman Koo Bon Hak will see his direct stake reduced from 19.9% to 11%, while non-independent executive director Hoe Kian Choon’s stake will decrease from 11.4% to 10%.

Of the six new listings since the US announced its reciprocal tariffs, which took effect on April 2, five Bursa Malaysia-listed companies have seen their share prices fall below their IPO levels, according to data compiled by The Edge. Year to date, more than half of the IPOs have also dipped below their listing prices.

SumiSaujana Group Bhd (KL:SUMI) is the worst IPO performer so far in 2025, having dropped 25% from its IPO price of 24 sen. The company was listed on the ACE Market on April 9 — just days after the tariff measures came into force, sparking a global market sell-off.

Other underperforming IPOs are MSB Global Group Bhd (KL:MSB), which has declined 15% from its IPO price of 20 sen; Fibromat (M) Bhd (KL:FIBRO), whose shares were down 10% from its IPO price of 55 sen; WTEC Group Bhd (KL:WTEC), which fell 6% from its IPO price of 25 sen; and West River Bhd (KL:WESTRVR), which dropped 5.13% from its IPO price of 39 sen.

In contrast, the best-performing IPO year-to-date is Oriental Kopi Holdings Bhd (KL:KOPI), which has surged 98.86% above its IPO price of 44 sen. The stock hit its all-time high of 98.5 sen on Jan 23, when it debuted on the Main Market.  

Other IPOs that have delivered decent returns include Swift Energy Technology Bhd (KL:SET), which has risen 41.07% above its IPO price of 28 sen, while Richtech Digital Bhd (KL:RTECH) is up 28% from its IPO price of 25 sen.

Read also:
Cuckoo International delays Bursa listing to June amid market rout
Cuckoo launches Malaysia’s biggest IPO in seven months at RM1.29 per share
Cuckoo Malaysia files for Main Market IPO to raise funds for expansion 
Cuckoo International gets RHB, AmInvestment to back upcoming IPO's retail tranche