KUALA LUMPUR (April 20): Manforce Group Bhd, en route to the ACE Market, leaves no upside for investors at its listing price amid potential earnings decline this year, TA Securities flagged.

The stock should be valued at 38 sen per share, the same as its initial public offering (IPO) price, the research house said. While there is no direct competitor on Bursa Malaysia, peers in Singapore and Japan average 12 times their 2027 earnings, lower than Manforce’s IPO valuation, the house noted.

Further, the company that mainly provides foreign worker management services could see earnings fall 4% this year before resuming growth in 2027, according to TA Securities’ projections.

Applications for the IPO will close on April 21, with the company slated to list on May 6.

Manforce is a workforce management services firm, specialising in recruitment and management of foreign workers, as well as project cleaning services. The company was previously listed on the LEAP Market.

Upon listing, Manforce is expected to have a market capitalisation of about RM152 million. At the IPO price, the company is valued at about 15 times its trailing 12-month earnings.

A government halt on new foreign worker arrivals since May 2024 has limited Manforce’s ability to grow its managed headcount and recognise new levy-related revenue, TA Securities said.

However, the research house expects a recovery over 2027-2028, supported by the Malaysian government’s removal of foreign worker quota application deadlines in March 2026.

“The pipeline for managed headcount growth is strengthening” as Manforce has assisted customers in submitting 5,260 recruitment quota applications, the house noted.

The IPO is expected to raise RM30.4 million for its operations and expansion, according to its prospectus. An offer for sale of existing shares, meanwhile, will generate another RM7.6 million for its managing director Datuk Wong Boon Ming.

The company has earmarked RM14.74 million from the IPO’s proceeds to expand the group’s business operations by increasing its recruitment quota. The rest will go towards IT and operational upgrades, as working capital and to cover listing expenses.

M&A Securities is the principal adviser, sponsor, underwriter and placement agent for the IPO, while Eco Asia Capital Advisory Sdn Bhd is the financial adviser.

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