MMC Ports IPO signals Malaysia's market shift

Malaysian Reserve

a day ago

The relisting puts Malaysia's largest port operator in the spotlight and could shape the direction of Bursa Malaysia
by RUPINDER SINGH
AFTER years of subdued sentiment and a flurry of small-cap listings, MMC Port Holdings Bhd is preparing to relist in what could become Malaysia's most significant IPO in over a decade.
The listing, which market observers are closely watching, may be the catalyst Bursa Malaysia needs to reset market expectations and revive institutional interest.
The country's largest and most integrated port operator, is set to offer up to 4.27 billion existing shares, equivalent to 30% of its total issued shares. The shares will be sold by MMC Corp Bhd.
The offering will be split between 3.99 billion shares allocated for institutional investors and 286.1 million shares for retail investors.
Notably, the company will not be issuing new shares and therefore, will not receive any proceeds from the IPO.
All funds raised, estimated at between RM6 billion and RM8.4 billion depending on pricing, will go directly to the selling shareholder.
In its draft prospectus, MMC Ports said it does not currently require additional equity funding, adding that it has sufficient working capital to operate sustainably over the next 12 months.
The company expects to list as early as September 2025, subject to market conditions and regulatory approvals.
Footprint
The group operates a comprehensive portfolio of strategic port assets across Malaysia. Its footprint includes the Port of Tanjung Pelepas in Johor, a leading transhipment hub; Johor Port, which supports gateway cargo operations; Northport and Southpoint in Port Klang, Selangor; Penang Port in the north; Tanjung Bruas Port in Melaka; and Andaman Port in Kedah, where ship-to-ship transfer activities are handled.
It also operates three cruise terminals that support Malaysia's tourism and passenger sectors.
The government, through the Ministry of Finance Inc, holds one special share in four of these key subsidiaries, granting it the right to appoint a board member in each company. This highlights the strategic national importance of MMC Port's operations.
Financially, MMC Port remains solid, if not spectacular. For the year ended Dec 31, 2024 (FY24), the company posted a net profit of RM636.6 million, a decline of 9.2% from the RM701.1 million it recorded in 2023.
Revenue, however, rose by nearly 10% to RM4.36 billion in 2024.
The dip in net profit was attributed to increased operational costs and a more challenging trade environment.
Nonetheless, the company generated over RM2 billion in operating cash flow and management is confident in its liquidity position, supported by bank balances and undrawn facilities.
Market Impact
What distinguishes this IPO from the dozens that have come before it in recent years is its scale, profile and potential market impact.
If it achieves the targetted valuation of up to US$7 billion, or approximately RM33 billion, MMC Port could be a strong candidate for inclusion in the FBM KLCI, the benchmark index of Bursa Malaysia.
That alone would elevate the listing above the flood of small-cap offerings that have dominated the ACE and LEAP Markets over the past five years.
Hence, the impending listing could inject new life into Bursa Malaysia.
'If the IPO performs well, we believe it could help lift sentiment on Bursa Malaysia to some extent,' said Tradeview Capital portfolio manager Neoh Jia Man.
'Given its size and profile, the listing is likely to attract significant investor attention and trading interest, particularly as MMC Port is expected to be a strong candidate for KLCI inclusion.'
Indeed, Malaysia's equity market has suffered from a lack of large, investable IPOs in recent years.
While the number of new listings remains healthy — with over 60 expected this year alone — the market has been criticised for offering low-float, low-liquidity IPOs that do not meet the needs of institutional investors.
Bursa Malaysia's total market capitalisation stood at around RM1.88 trillion in April 2025, and foreign participation — which remained structurally depressed at around 19.6% of the market — is still lagging regional peers, despite some recent inflows.
However, valuation remains a key question.
Westports Holdings Bhd, MMC Port's closest listed peer, is currently trading at a forward price-to-earnings (P/E) ratio of around 20 times, buoyed by optimism following a recent tariff hike.
Market watchers say MMC Port is targetting a valuation that implies a forward P/E of more than 25 times, which some investors may find rich.
'We expect MMC Port to be floated at a valuation of over RM28 billion, implying a forward P/E of more than 25 times.
'This may not be particularly appealing to investors, especially when compared to Westports. Furthermore, investor appetite could be dampened by the uncertain global trade outlook, particularly due to lingering concerns over US tariff policies,' said Neoh.
Long Term Appeal
Still, MMC Port offers stability and long-term appeal.
Its diversified income base, entrenched market position and strategic locations along the Strait of Malacca make it an attractive infrastructure play.
The company also benefits from strong relationships with major shipping lines, integrated access to industrial zones and long-term port concessions that reduce earnings volatility.
In line with global best practices, MMC Port will be seeking cornerstone investors to provide price stability and credibility ahead of the listing. It will also include a 4.5% overallotment option to meet additional demand.
The deal is led by CIMB Investment Bank Bhd as principal advisor and sole managing underwriter, with CIMB and HSBC (S) Ltd acting as joint global coordinators and bookrunners. Legal counsel is provided by Lee Choon Wan & Co, Kadir Andri & Partners, and international firms Latham & Watkins and Baker McKenzie Wong & Leow.
MMC Corp, which controls MMC Port, was previously listed on Bursa Malaysia in 1977 before being privatised in December 2021 at a market value of RM6.1 billion.
The relisting of its flagship port assets at a potentially fivefold valuation is a strong statement of the group's value creation efforts and confidence in public markets.
Still, analysts caution against assuming a domino effect.
'We do not expect it to trigger a wave of large-scale IPOs unless its performance is exceptionally strong,' Neoh noted. 'Likewise, we do not believe this listing alone will be sufficient to spark a broad-based rerating of the Malaysian equity market.'
Nonetheless, MMC Port could set an important precedent.
A successful listing may encourage other conglomerates or government-linked companies (GLCs) to consider unlocking value through spin-offs and listings of mature assets. This approach, already common in Singapore and Thailand, could help deepen Malaysia's capital markets and enhance its appeal to long-term investors.
For now, MMC Port is a litmus test.
Its size, sector and strategic relevance give it the potential to reignite confidence in Bursa Malaysia. In a market that has been starved for high-quality, large-scale listings, MMC Port offers a rare opportunity to steer the narrative back toward growth, depth and institutional strength.
Whether it marks the beginning of a new chapter or remains a one-off success will depend not only on its listing day performance, but also on its ability to deliver steady returns and inspire follow-through action across the market.
This article first appeared in The Malaysian Reserve weekly print edition