Spotlight: More Malaysian firms see opportunities with listing in Hong Kong

Source: Xinhua| 2017-09-23 10:37:24|Editor: Yang Yi
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KUALA LUMPUR, Sept. 23 (Xinhua) -- Hong Kong Stock Exchange has always been considered as the bellwether for initial public offering (IPO) in the global market, as it plays a leading role as an important gateway for companies to reach a wider pool of investors.

As more Malaysian companies are expanding their regional businesses, it seems that they are also keen in floating their shares in Hong Kong.

The most recent example was BGMC, the first Malaysia-based construction services company that made its debut in Hong Kong last month.

BGMC's management told Xinhua that it sees Hong Kong's stock market as one with higher recognition among global investors, as it is an Asian financial hub.

"Listing in Hong Kong helps differentiate the group from its peers in Malaysia and contribute to the group's future expansion and business growth both in Malaysia and overseas," the management added.

For Wong Teck Meng, chief executive officer of Malaysia's fund management company Areca Capital, Hong Kong as a financial hub also has a more liberalized and advanced stock market.

He sees the trend to continue as Hong Kong remains an attractive platform for Malaysian companies to grow their regional platform.

Besides, Malaysian companies that listed in Hong Kong tend to have higher valuations, he said.

His views have been shared with Kong Hon Kong, founder of Nirvana Asia Group, the largest integrated bereavement care service provider in Asia with a presence in China, Thailand, Vietnam, Singapore and Indonesia.

"When I listed Nirvana in Hong Kong, the share was traded as much as 20 times of its price to earnings ratios (P/Es). But when it was listed in Malaysia, the average P/E of the share was only 10 times," Kong told Xinhua.

He also saw Hong Kong as an excellent regional platform to grow the group's business.

Kong listed his bereavement care business as NV Multi Corporation in Malaysia in 2000, but privatized it after 10 years. He later listed his company in Hong Kong in 2014 but took it private with private equity firm CVC Capital Partners.


The recently listed company BGMC also noted it would enhance the group's profile among potential customers in China who are eyeing the Southeast Asian markets in light of the Belt and Road Initiative.

Proposed by China in 2013, the Belt and Road Initiative aims to build trade and infrastructure networks connecting Asia with Europe and Africa on and beyond the ancient Silk Road routes. It comprises the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

Earlier, Malaysia's listed semiconductor firm Pentamaster, as well as property, construction and manufacturing firm PRG Group, both indicated they would spin off one of their business units on Hong Kong exchange.

PRG's managing director Lua Choon Hann, who planned to list the group's manufacturing business in Hong Kong, told Xinhua that Hong Kong is not only a gateway to the Chinese Mainland, but also a platform for Malaysia companies which want to become a regional player.

Although the group's manufacturing plants are in Vietnam and Malaysia, more than 90 percent of its products are exported to over 30 countries. This has also created a need for Lua to list in Hong Kong's Growth Enterprise Market (GEM).

Meanwhile, Thong Guan Industries, a firm based in the northwestern state of Penang, has recently showed its interest in listing its food and beverages arm in Hong Kong's GEM.

Its executive director Alvin Ang said he believes the GEM is more vibrant than the Malaysian and Singaporean stock exchanges with exposure and participation from the mainland Chinese investors.

"We plan to grow our organic noodle business in China to relate to the mainlanders. GEM will grow in tandem with the growing affluence and wealth of the Chinese," he told Xinhua.

For him, GEM is not only offering better valuations to Malaysian companies with potential, but also brings the group closer to the growing Chinese investors.