Healthy IPO pipeline to face tougher investor demands in 2H - The Edge Malaysia

KUALA LUMPUR, 7 AUGUST 2026 —

FOLLOWING a strong first half that kept Bursa Malaysia’s position at the forefront of Southeast Asia’s initial public offering (IPO) market, industry professionals expect listing activity to remain robust in the second half of this year, supported by a healthy pipeline of prospective issuers. However, investors are becoming more discerning, placing greater weight on valuation, earnings quality, institutional backing and the durability of each company’s growth prospects. So far this year, Malaysia has recorded 41 IPOs — six on the Main Market, 29 on the ACE Market and another six on the LEAP Market, data on Bursa’s website shows. “At the present pace, the full-year IPO count should remain strong and could come close to, or potentially exceed, the 60 listings achieved in 2025. However, the more important observation is not just the number of companies coming to market, but also the size and diversity of the listings,” Baker Tilly Malaysia managing partner for audit and assurance Datuk Lock Peng Kuan tells The Edge. Notably, Bursa shifted its emphasis in 2026 from just the number of listing to quality and scale — targeting RM28 billion in IPO market capitalisation this year and encouraging large IPOs, defined as listings valued at RM1 billion or more, to deepen the market and stimulate trading interest. This emphasis was reflected in the year’s most prominent transaction, Sunway Healthcare Holdings Bhd (KL: SUNMED ), which listed on the Main Market on March 18. The group raised RM2.86 billion in Malaysia’s largest IPO in nine years and stood out as among Southeast Asia’s largest healthcare listings. Valued at RM16.7 billion at its offer price, the IPO supported by about 20 cornerstone investors made a strong debut, closing nearly 28% above its RM1.45 issue price on the first day. Sunway Healthcare shares closed at RM1.96 last Wednesday (July 22), still 35% above its IPO price. The aftermarket performance of other Main Market debutants was more varied. As at last Wednesday, MTT Shipping and Logistics Bhd (KL: MTTSL ) closed at 97 sen, 5.8% below its RM1.03 issue price, while Empire Premium Food Bhd (KL: EMPIRE ), the parent of the Empire Sushi chain, was 41.4% above its 70 sen offer price at 99 sen. SkyeChip Bhd (KL: SKYECHIP ) was the standout performer. The home-grown semiconductor designer rose as high as RM3.50 on its Main Market debut, almost four times its 88 sen IPO price, and closed at RM3.02 last Wednesday. Lock also highlights the listing of OCK Group Bhd’s (KL: OCK ) former power-engineering subsidiary, EI Power Bhd (KL: EIPOWER ), as an example of how listed groups can unlock the value of individual divisions. “This demonstrates that the capital market is not only for privately owned businesses seeking growth capital. Existing listed groups can also use it to unlock the value of a distinct business division, establish a separate capital-raising platform and give investors clearer visibility over the performance and prospects of that business,” he says. Yet beneath the headline numbers, dealmakers have observed a shift in investor behaviour, with demand following companies that have secured institutional backing. “Investors are very selective now. Retail investors will only put their money in when they see IPOs that are institutionally backed. Otherwise, they may stay out,” remarks M&A Securities Sdn Bhd managing director Datuk Bill Tan Choon Peow. Tan cites poultry player Hock Soon Capital Bhd (KL: HOCKSOON ), which was offered at 7.1 times FY2025 earnings but attracted limited institutional interest because some funds viewed poultry as a mature or “sunset” industry. By contrast, EI Power, which provides back-up electrical supply solutions to data centres, continued to draw institutional demand. “The deciding factor for IPOs is not whether it is an ACE Market or Main Market listing. It is the business itself and the sector in which it operates,” Tan says. He expects businesses exposed to data centres, semiconductors and renewable energy to remain attractive. On May 28, the Securities Commission Malaysia announced revisions to its Equity Guidelines and enhancements to the primary-market framework. For the Main Market, the changes include higher profit requirements, stronger financial-reporting standards, greater flexibility in assessing operating cash flow and broader eligibility for infrastructure-related listings. Under the revised profit test, a Main Market applicant must record aggregate after-tax profit of at least RM30 million over its latest three full financial years, including at least RM15 million in the most recent year. Previously, applicants needed aggregate after-tax profit of at least RM20 million over three to five years, including at least RM6 million in the latest year. The ACE Market, meanwhile, is being reinforced as a sponsor-driven market. The revisions include a minimum two-financial-year post-listing record before a company may transfer to the Main Market, the removal of certain sponsorship and moratorium exemptions, and minimum public-share allocation requirements. Lock says the changes should sharpen the distinction between the Main and ACE Markets, but warns issuers against treating the higher qualifying threshold as justification for demanding higher valuations. “Meeting a higher profit threshold does not automatically entitle an issuer to a higher valuation. Valuation will still depend on factors such as earnings quality, sustainability, growth prospects, return on capital, governance, industry dynamics and comparable listed companies,” he says. He sees the greater flexibility in assessing operating cash flow as pragmatic. “A rigid positive cash-flow requirement could disadvantage otherwise viable companies whose cash is temporarily absorbed by expansion, such as property developers acquiring land, retailers building inventory or manufacturers increasing production capacity. These businesses may record negative operating cash flow even while remaining profitable and commercially sound,” he says. “The principal adviser must explain and substantiate any negative operating cash flow, while the applicant must still demonstrate a healthy financial position with no modified audit opinion or material going-concern uncertainty. This creates a more balanced framework that recognises differing cash-flow patterns across industries.” Under the revised rules, renewable energy companies may combine several projects, such as solar, wind or hydro assets, to meet the Main Market’s RM500 million infrastructure-project threshold, provided each project costs… (AI-assisted rewrite, based on the original source)

Related: Sunway · Bursa Malaysia