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Malaysian Reserve
2 days ago
- Business
- Malaysian Reserve
MMC Ports IPO signals Malaysia's market shift
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
The Star
11-06-2025
- Business
- The Star
Malaysia's manufacturing sales rise 4.8% in April
KUALA LUMPUR: Malaysia's manufacturing sector recorded a 4.8 per cent year-on-year increase in sales value to RM160.6 billion in April 2025, according to the Department of Statistics Malaysia (DoSM). Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the growth was mainly driven by the food, beverages and tobacco sub-sector, which continued its double-digit expansion with an 11.1 per cent rise. "This was accompanied by steady growth in the electrical and electronics products, and the non-metallic mineral products, basic metal and fabricated metal products sub-sectors, which expanded by 9.8 per cent and 4.6 per cent, respectively,' he said in a statement. However, on a monthly basis, sales value fell 2.3 per cent from RM164.3 billion in March. Mohd Uzir said export-oriented industries, which made up 70.3 per cent of total sales, saw growth mainly from the manufacture of vegetable and animal oils and fats. Meanwhile, the manufacture of computers, electronics and optical products rose 10.6 per cent, while machinery and equipment increased by 7.9 per cent. Domestic-oriented industries expanded by 3.6 per cent in April, supported by a 10.0 per cent rise in food processing products, 5.9 per cent in basic metals, and 3.7 per cent in fabricated metal products (excluding machinery and equipment). On employment, Mohd Uzir said the sector recorded 2.40 million workers in April, an increase of 1.2 per cent year-on-year. "The growth was largely supported by food, beverages and tobacco (1.9 per cent); non-metallic mineral products, basic metal and fabricated metal products (1.9 per cent); and electrical and electronics products (1.3 per cent),' he said. Salaries and wages paid in April totalled RM8.3 billion, up 2.4 per cent from a year earlier, though they declined 0.9 per cent from RM8.4 billion in March. As a result, sales value per employee rose by 3.6 per cent to RM66,907. Average salaries and wages per employee climbed 1.2 per cent to RM3,460. - Bernama
New Straits Times
06-06-2025
- Business
- New Straits Times
Ecomate acquires majority stake in IT firm for RM8.4mil as part of diversification strategy
KUALA LUMPUR: Home furniture specialist Ecomate Holdings Bhd is acquiring a 60 per cent equity stake in Progressive Computer Systems Sdn Bhd (PCS) for RM8.4 million. This acquisition is part of its strategy to diversify into the information and communications technology (ICT) sector, Ecomate said in a Bursa Malaysia filing today. "The stake will be acquired from Law Seng Peng, a 66-year-old Malaysian who is currently the sole director and shareholder of PCS, with the transaction to be settled fully in cash. "Upon completion of the proposed acquisition, PCS will become a subsidiary company of Ecomate," said the furniture maker. PCS, incorporated in 1990, is involved in the marketing and servicing of computers, peripherals, and software, as well as software development and training services. Ecomate said the proposed acquisition represents an opportunity to venture into the ICT solutions business and diversify its earnings base. The acquisition will be funded entirely through internally generated funds. The group added that Law will remain as a director of PCS post-acquisition and continue to be involved in the company's operations. Regarding the proposed diversification, Ecomate said it is currently involved in the design, production and sale of ready-to-assemble (RTA) furniture, including living room, bedroom and customised pieces. It noted that financial contributions from PCS may account for 25 per cent or more of the group's net profit in the future, which triggered the need for shareholder approval under Bursa Malaysia's listing requirements. An extraordinary general meeting will be convened to seek shareholder approval for both the acquisition and diversification proposals.
The Star
08-05-2025
- Business
- The Star
Manufacturing sector sales value 3.7% y-o-y at RM164.3bil in March 2025
KUALA LUMPUR: Malaysia's manufacturing sector sales value rose 3.7 per cent year-on-year (y-o-y) at RM164.3 billion in March 2025 as compared to a 4.7 per cent y-o-y growth at RM153.1 billion in February 2025, according to the Department of Statistics Malaysia (DOSM). Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the growth in sales value in March 2025 was mainly driven by the food, beverages and tobacco sub-sector, which recorded a strong growth of 11.8 per cent y-o-y in March 2025 (February 2025: 14.5 per cent). "This was followed by the electrical and electronics products and non-metallic mineral products, basic metal and fabricated metal products sub-sectors at 7.4 per cent (February 2025: 7.8 per cent) and 4.0 per cent (February 2025: 4.4 per cent), respectively,' he said in the department's Monthly Manufacturing Statistics for March 2025 released today. He said the sales value of export-oriented industries, representing 70.9 per cent of total sales, expanded by 4.6 per cent y-o-y in March 2025 (February 2025: 5.8 per cent). "Furthermore, the manufacture of computer, electronics and optical products also rose by 8.0 per cent (February 2025: 7.8 per cent), while the manufacture of rubber products grew by 7.5 per cent (February 2025: 8.4 per cent),' he added. Similarly, Mohd Uzir said the domestic-oriented industries grew by 1.8 per cent y-o-y in March 2025, after registering a y-o-y increase of 2.3 per cent in February 2025. On a month-on-month basis, he said both export and domestic-oriented industries rebounded by 8.6 per cent and 4.2 per cent, respectively. Commenting on the number of employees, Mohd Uzir said there are 2.39 million persons engaged in the manufacturing sector during March 2025, a 1.1 per cent y-o-y rise (February 2025: 1.2 per cent). On a month-on-month basis, the number of employees in this sector decreased by 0.2 per cent. He said the salaries and wages paid in the manufacturing sector also posted a y-o-y increase of 1.8 per cent (February 2025: 2.0 per cent), amounting to RM8.4 billion in March 2025, while a month-on-month comparison showed a 0.4 per cent drop. "Subsequently, the sales value per employee went up to RM68,805 (2.6 per cent), while the average salaries & wages per employee was RM3,508, rose by 0.7 per cent year-on-year,' he said. For the manufacturing sector's performance in the first quarter of 2025, the sales value was registered at RM475.6 billion, a 4.0 per cent rise, compared to the same period of 2024 (4Q 2024: 4.4 per cent). The number of employees was up by 1.1 per cent to 2.39 million persons, while salaries and wages increased by 1.8 per cent to RM25.3 billion, with the sales value per employee standing at RM199,108, a 2.9 per cent growth. - Bernama
Malay Mail
21-04-2025
- Business
- Malay Mail
Google faces trial in US bid to end search monopoly
NEW YORK, April 21 — Alphabet's Google faces a historic trial today as US antitrust enforcers in Washington seek to force the tech giant to sell off its Chrome browser as part of a bid to restore competition to the market for online search engines. The US Department of Justice is heading into trial after two major legal victories against Google, having won a ruling in August that Google monopolised search. The trial comes on the heels of a win in a Virginia court on Thursday where a judge ruled in a separate antitrust case that Google maintains an illegal monopoly in advertising technology. The outcome of the trial could fundamentally reshape the internet by unseating Google as the go-to portal for information online. Google plans to appeal the final ruling in the case. 'When it comes to antitrust remedies, the US Supreme Court has said that 'caution is key.' DOJ's proposal throws that caution to the wind,' Google executive Lee-Anne Mulholland said in a blog post yesterday. US District Judge Amit Mehta is scheduled to oversee the three-week trial at the same courthouse where Meta Platforms is facing its own antitrust trial over the acquisitions of Instagram and WhatsApp. The US Department of Justice and a coalition of 38 state attorneys general have proposed far-reaching measures designed to quickly open the search market and give new competitors a leg up. Their proposals include ending exclusive agreements in which Google pays billions of dollars annually to Apple and other device vendors to make Google the default search engine on their tablets and smartphones. Google would also have to license search results to competitors, among other requirements. And it would be made to sell its Android mobile operating system if other remedies fail to restore competition. Prosecutors have said they expect testimony about how Google's agreements to be the default search engine on mobile devices have hampered distribution efforts by artificial intelligence companies. Witnesses from Perplexity AI and OpenAI are expected to take the stand. Google sees the proposals as extreme, and said the court should stick to limiting the terms of its default agreements. The US$1.9 trillion (RM8.4 trillion) tech company has been subsidizing browser makers such as Mozilla by paying to remain the default search engine. Cutting off that financial support could threaten their existence, Google says. And ending payments to device makers would raise the cost of smartphones, the company claims. Google plans to call witnesses from Mozilla, Verizon and Apple, which launched a failed bid to intervene in the case. Few potential buyers of Chrome have the same incentive as Google to maintain the free open-source code that underpins it, and which others including Microsoft use as a basis for their own browsers, the company says. — Reuters
