Best IPO: Revenue aces its way to the top of the class in 2018

This article first appeared in The Edge Malaysia Weekly, on December 31, 2018 - January 06, 2019.

Revenue made its debut on the ACE Market on July 18. Photo by Suhaimi Yusuf/The Edge

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REVENUE Group Bhd’s share price performance has far surpassed that of all the other companies that made their debut on Bursa Malaysia this year.

Listed on the ACE Market on July 18, the cashless payment solutions provider has seen its share price gain a whopping 120% to RM1.37 as at Dec 21.

On debut day, it climbed an impressive 69% to 62.5 sen over its initial public offering price of 37 sen.

It is worth noting that the year-old Leading Entrepreneur Accelerator Platform Market contributed half of the 22 IPOs on Bursa this year. The Main Market attracted only two offerings and the ACE Market, nine.

Even so, Revenue’s impressive share price performance — in spite of the challenging market conditions — made it the best IPO for 2018. As at Dec 21, only a fifth of Bursa’s listed companies were trading higher year to date.

M&A Securities Sdn Bhd was the adviser, sponsor, underwriter and placement agent for Revenue’s IPO.

Revenue’s products and services can be divided into three segments — the deployment of electronic data capture terminals, electronic transaction processing and solutions, and services related to payment infrastructure. Its customers include local banks, non-bank institutions, physical store merchants and online store merchants.

A total of 55.71 million shares were issued under the public portion and the group offered 16.71 million shares for sale. This was oversubscribed by 11.22 times, underscoring the substantial interest. Upon listing, Revenue’s share base was enlarged to 222.85 million shares.

Of the RM26.8 million raised from the IPO, RM6.2 million was accrued to the selling shareholders and the balance to the company.

About 40% of the RM20.6 million proceeds, or RM8.1 million, has been slated for use as capital expenditure. The company also plans to use RM4.04 million to enhance its payment platform, RevPay, and expand its IT team.

Some RM2.5 million will be used to pare down its borrowings and the remaining proceeds for other business expansion (RM1.5 million), working capital (RM1.77 million) and listing expenses (RM2.7 million).

Mainly engaged with local companies at present, Revenue is seeking to expand its business into selected markets in the Asean region, in collaboration with local financial institutions.

An IPO that deserves a notable mention this year is Mi Equipment Holdings Bhd, which gained 8.5% over its RM1.42 offer price at the close of its debut day on the Main Market on June 20.

It climbed another 38% when it closed at RM2.13 on Dec 21.

Mi Equipment raised RM217 million, making it the largest IPO this year. The principal adviser for the offering was Affin Hwang Investment Bank Bhd.

The company plans to use the proceeds to build two new factories-cum-offices in Bayan Lepas and Batu Kawan and carry out research and development. A portion will also be used as working capital.

Mi Equipment’s offer of 25 million shares to the public was oversubscribed by 1.2 times (1,967 applications for 28.9 million shares received). This was significant as it came amid heightened market uncertainties following the unexpected triumph of the Pakatan Harapan coalition in the 14th general election on May 9.

 

 

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