Singapore IPO market 2018 mid-year report - Deloitte
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Singapore IPO market 2018 mid-year report
Singapore IPO market | 2018 mid-year report Key observations 03 Overview of Singapore IPOs in H1 2018 04 IPOs on the SGX in H1 2018 05 Upcoming IPOs on the SGX 06 Overview of Singapore IPOs: geographical analysis 07 Overview of Singapore IPOs: industry analysis 08 Singapore companies: SGX or HKEx? 10 SGX developments in H1 2018 11 Macro factors 11 Report as of June 30, 2018 02
Singapore IPO market | 2018 mid-year report
Key observations
S$422
million
Real estate listings
S$55
87%
million
Singapore Stock
Exchange (SGX)
Total IPO Proceeds
SLB
Sasseur REIT Development
01. Real estate listings continue to be the main driver for IPOs on
the Singapore Stock Exchange (SGX), with Sasseur REIT and
SLB Development Ltd. raising S$422 million and S$55 million
respectively in the first half of 2018 , accounting for 87% of total
IPO proceeds on the SGX.
02. Foreign based assets have a dominant presence on the SGX,
which is evidently a preferred international market for listing. In
the past five years, foreign companies listed on the SGX from
developed countries such as Australia, Europe, United States
of America, Japan and in recent years, China, typically raised
between three to seven times more funds when compared
to Singapore counterparts.
03. The healthcare industry has been on a bullish trend. In the
recent five years, healthcare IPOs have shown an increasing
price earnings ratio on listing, and have delivered strong growth,
of an average 24.5% share price returns since their IPO.
04.In the first half of 2018, Singapore companies that sought listing
on the Hong Kong Stock Exchange (HKEx) increased more than
two-fold, from three (2017 H1) to seven (2018 H1). Singapore-
based construction companies continue to show a preference
for a listing on the HKEx, with 10 out of the 12 local domiciled
construction companies choosing the HKEx in the past 5 years.
03Singapore IPO market | 2018 mid-year report
Overview of Singapore IPOs in H1 2018
Singapore saw 7 IPOs in the first half of 2018, with S$548 million in proceeds raised with total market capitalisation of S$1.98 billion. This
compares to the 9 IPOs in the first half of 2017, which raised S$464 million with market capitalisation of S$2.14 billion.
Number of IPOs: H1 vs. H2 trend
2011 2012 2013 2014 2015 2016 2017 2018
H1 11 7 10 9 3 7* 9 7
H2 10 15 17 20 10 9 11 ?
* Excludes secondary listing of Top Glove Corporation Bhd
SGX’s domestic IPO activity and performance remains IPO amount raised from 2014 to 2018 H1
stable and strong in comparison to previous half-years’
performance. S$'mil
6,000
Looking at the key exchanges in the region, there have 4,195
been a general year-on-year decrease in 2018 H1: 4,000
2,564
•• The Shanghai Stock Exchange had 37 IPOs in 2018
1,608
H1 which raised RMB 64.8 billion, resulting in a 70% 2,000
886 456 655 464 548
decline from the 120 IPOs which raised RMB 76.7 56
billion in 2017 H1, due to a fall in listing approvals.
2014 H1 2014 H2 2015 H1 2015 H2 2016 H1 2016 H2 2017 H1 2017 H2 2018 H1
•• The Stock Exchange of Hong Kong saw a 8.6% fall in IPO Market Capitalisation from 2014 to 2018 H1
funds raised, despite seeing a 44.1% increase in the S$'mil
number of IPOs from 68 to 98.
10,000
8,081
7,221
6,339
5,000
2,238 2,157 2,144
1,476 1,982
412
-
2014 H1 2014 H2 2015 H1 2015 H2 2016 H1 2016 H2 2017 H1 2017 H2 2018 H1
(Source: SGX)
Average IPO market capitalisation and funds raised (2014 –2018 H1)
S$'mil
600
527.68
424.15
500
400
274.74
300 211
200 145
100
-
2014 2015 2016 2017 2018
Average Market Cap Average Fund Raised (Source: SGX)
04Singapore IPO market | 2018 mid-year report
IPOs on the SGX in H1 2018
With a Mainboard REIT and six Catalist listings in the first half of 2018, the Singapore IPO market raised 18% more in IPO proceeds period-
on-period.
IPO Share
Price IPO Share
Listing Date of amount IPO Offer price as at Country of
# Company Earning Market Price % Industry
platform listing raised Price (S$) 30-Jun- operations
ratio Cap (S$'m) change
(S$'m) 2018 (S$)
LY Corporation Consumer
1 Catalist 31-Jan-18 19.72 8.76 127.18 0.26 0.25 -6% Malaysia
Limited Business
Financial
2 Ayondo Ltd Catalist 26-Mar-18 21 .00 N/A 130.69 0.26 0.093 -64% Europe
Services
3 Sasseur REIT Mainboard 28-Mar-18 421.6 N/A 1,340.22 0.8 0.73 -9% Real Estate China
SLB
4 Development Catalist 20-Apr-18 54.74 9.79 209.99 0.23 0.195 -15% Real Estate Singapore
Ltd.
Asian Life
Healthcare Sciences
5 Catalist 20-Apr-18 10.79 127.80 66.70 0.23 0.265 15% Singapore
Specialists and Health
Limited Care
Hyphens Life
Pharma Sciences
6 Catalist 18-May-18 15.60 10.40 78.00 0.26 0.22 -15% Singapore
International and Health
Limited Care
Energy and
7 Jawala Inc. Catalist 1-Jun-18 4.50 42.60 29.62 0.25 0.26 4% Malaysia
Resources
Total 547.95 1,982.40 -12.8%
(Source: SGX)
The largest IPO in 2018 H1 Top Performer Notwithstanding Worst Performer Ayondo is the
the decrease in general Singapore Singapore's 1st listed fintech firm
Trade Index (STI) amidst global trade on the Singapore Stock Exchage
tensions, Asian Healthcare Specialists (SGX). Ayondo offers social trading
Limited, a Company comprising of four services and brokerage services to
clinics under The Orthopaedic Centre, both business to consumer (B2C) and
specialising in a range of general and B2B (business to business) clients
sub-specialised orthopaedic, trauma through two proprietary platforms:
and sports services, have managed WeTrade and Tradehub. Traders can
a commendable price returns of 15% view one another's portfolios, trading
since its listing in April 2018. performance, as well as share and
follow one another's investment
strategies on a real-time basis.
05Singapore IPO market | 2018 mid-year report
Upcoming IPOs on the SGX
The following details the IPO lodgements/registrations up to 30 June 2018 details below:
Lodgement/ Estimated Amount
Mainboard/ Catalist
Registration Date Raised (S$’mil)
PropNex Limited Mainboard 28-Jun-18 60
(Registration)
DLF Holdings Limited Catalist 22-Jun-18 4
Synagie Corporation Ltd Catalist 29-Jun-18 211
Koufu Group Limited Mainboard 28-Jun-18 74
(Source: SGX)
1
Estimated using average amount raised for the six Catalist IPOs in 2018 H1.
Following the successful listing of APAC Realty Limited in the prior year, with share price returns of 33% since
IPO, PropNex was successfully listed on 2 July 2018, raised $60 million from the IPO, at a market capitalisation
of S$251 million.
Amount raised in 2016 H1, 2017 H1 and 2018 H1 (including lodgements/registrations)
S$'mil
3,500
Mainly due to the
3,000 listing of Netlink
NBN Trust which
2,500
raised S$2.45
billion in July 2017.
2,000
1,500
1,000
500
0
2016 H1 2017 H1 2018 H1
Actual Lodgements/Registrations as at 30 June 2018
(Source: SGX)
06Singapore IPO market | 2018 mid-year report
Overview of Singapore IPOs:
geographical analysis
The SGX continues to be an attractive listing destination of choice for both Singapore companies and foreign companies. As a well-
established capital market in Asia Pacific, SGX remains a preferred international exchange for listing. In the last five years, there were 45
Singapore companies and 40 foreign companies that listed on the SGX.
Between 2014 to 2018 H1, near 47% listing in SG are from overseas issuers:
Country of operations of Singapore IPOs (2014 - 2018 H1) Percentage of foreign issuers listing on SGX (2014 - 2018 H1)
China
Asia 13%
28%
Europe
Overseas 7%
47%
Singapore United States
8%
53% Southeast
Asia
34%
Australia
8%
Japan
2%
(Source: SGX)
For the period from 2014 to 2018 H1, a total of S$11.4 billion was raised on the SGX, of which 56% were from foreign domiciled companies:
S$’mil No. of IPOs
Average amount raised by country of operations
800 50
700 45
40
600
35
500 30
400 25
300 20
15
200
10
100 5
- 0
Asia Australia China Europe Southeast Singapore Japan United
Asia States
(Source: SGX) Average Amount Raised Number of IPOs
Overseas issuers from developed countries such as Australia, Europe, Japan and USA raised between 3-7 times more funds per IPO
listing than Singapore and Southeast Asia countries. This shows keen interest in investors of the SGX market to the increasing exposure
to overseas companies, in particular, Deloitte noted that the bulk of the cross border offering on the SGX were from the real estate based
industries.
07Singapore IPO market | 2018 mid-year report
Overview of Singapore IPOs:
industry analysis
IPO amount raised - by industry (2014 – 2018 H1)
No. of IPOs (S$‘mil)
25 $7,000
$6,145 22
$6,000
20
19
$5,000
15
$4,000
12
11
11 $3,000
10
$2,506
$2,000
3
6 $1,552
5
$1,000
$774 $213 $133 $94
1 $16
0 $0
Real Estate Technology, Media & Consumer Energy & Life Sciences & Public Sector Financial Services Industrial Products
Telecommunications Business Resources Health Care
2014 2015 2016 2017 2018 H1 Amt raised
(Source: SGX)
The Real Estate sector has been dominating Technology, Media and Telecommunications
Singapore's capital markets, having raised and Consumer Business accounted for 22% and
S$6.1 billion which accounted 54% of the total IPO 14% of the total amount raised respectively.
amount raised in the past five years.
In 2018 H1, this trend has been relatively
consistent, with Real Estate accounting for 87% of
the IPO amount raised.
08Singapore IPO market | 2018 mid-year report
IPO appetite is up among Healthcare firms, with at least 1 healthcare IPO every year since 2014, with all indicators out-performing the
market.
The Life Sciences and Healthcare sector appears to be the Since listing, the Healthcare sector has shown strength,
industry most highly valued by investors, with the highest average outperforming most other sectors in share price returns, including
PE ratio at IPO at an average of 20.8 times. traditional ones such as Financial Services, Energy & Resources and
Industrial Products.
Price Earnings (on IPO): 2014 - 2018 Share price returns (since IPO): 2014 - 2018
Consumer Energy & Life Public Financial Industrial Real TMT Consumer Energy & Life Public Financial Industrial
Real TMT
Business Resources Sciences Sector Services Products Estate Business Resources Sciences Sector Services Products
Estate & Health
& Health
Care Care
80
60 120%
40
70%
20
-
20%
(20)
(40)
-30%
(60)
(80) -80%
2014 2015 2016 2017 2018
(Source: SGX)
2014 2015 2016 2017 2018 (Source: SGX)
A further look into the healthcare industry:
Price Earnings 2014-2018 Healthcare Sector - P/E ratio vs Price Return (annual) % gain / loss
80 200%
60 69.1 150%
100%
40
50%
33.7
20 0%
3.8 4.0 12.5
0 -50%
2014 2015 2016 2017 2018
P/E ratio (on IPO)
(Source: Bloomberg)
Generally, price earnings of healthcare companies on the SGX Average Share Price Returns (%) since IPO
are traditionally listed at between 20 to 30 times earnings. The
healthcare companies have performed well, averaging 24.5% 24.52%
25.00%
return on share price return since their IPO. This compares with
the real estate sector which performed slight below average at 20.00%
-2.3% return in the same period. 15.00%
10.00%
Healthcare companies such as HC Surgical Specialist Limited,
5.00%
Singapore O&G Ltd, and TalkMed Group Limited, listed in 2016,
2015, 2014, have share price return of 150%, 38% and 200% 0.00%
-2.29%
respectively. More recently, Asian Healthcare Specialists Limited, -5.00%
listed on 20 April 2018, had a high PE ratio as at IPO of 127x, which
Average Share returns for Healthcare
is an indication that investors are bullish on the Healthcare sector.
Average Share returns for Real Estate (Source: Bloomberg)
09Singapore IPO market | 2018 mid-year report
Singapore companies: SGX or HKEx?
Since 2015, a total of 30 Singapore companies have been successfully listed on the Hong Kong Exchange (HKEx). The recent years have
seen a rise in Singapore domiciled companies seeking a listing on the HKEx.
SG companies listed on the SGX vs HKEx (2014 - 2018 H1)
No. of IPOs
14
In the first half of 2018, the number
13
12 of Singapore companies that sought
a listing on HKEx increased from 3
10 (2017 H1) to 7 (2018 H1).
8
8
7 7 7 7
6
5
4 4
4 3 3 3
2 SGX
2 1 1
0 0 0
0 HKEx
2014 H1 2014 H2 2015 H1 2015 H2 2016 H1 2016 H2 2017 H1 2017 H2 2018 H1
Source: SGX, HKEx and Bloomberg
It is interesting to note that the construction industry played a key role in fueling this trend. Of the 30 Hong Kong listings from Singapore
companies, one-third were construction-related companies. Of the 12 Singapore construction companies that went for an IPO in the
last five years, 10 chose HKEx and two chose SGX. The average funds raised and market capitalisation for each IPO were similar in both
exchanges.
Singapore company IPOs on SGX vs HKEx (2014 - 2018 H1) Singapore construction-related listings on
SGX and HKEx (2014 - 2018 H1)
S$'mil
S$'mil
18 25
16
20
14
12 15
10 10
8
5
6
4 -
SGX HKEX
2
0 Average market cap (S$ mil)
2014 2015 2016 2017 2018 H1
Average fund raised (S$ mil)
HK Total SGX Total HK Construction SGX Construction
(Source: SGX and Bloomberg) (Source: SGX and Bloomberg)
Some reasons for Singapore construction companies to list in Hong Kong:
01. the price-earnings (“PE”) of construction-related companies listed on the HKEx were usually double digit, while construction-related
firms listed on the SGX managed only single-digit PE;
02. to facilitate plans to expand operations into the Greater China Market; and
03. to tap on the multi-trillion-dollar institutional investor market in China.
10Singapore IPO market | 2018 mid-year report
SGX developments in H1 2018
“At Deloitte, we expect to
SGX consults on proposed SGX consults on Listing Rule
changes to quarterly reporting changes consequential to see a continuing healthy
requirements -11 January 2018 Code of Corporate Governance pipeline of domestic and
Review - 16 January 2018
cross border IPOs in spite
of global uncertainties in
relation to the escalating
SGX collaborates with fintech After two rounds of public trade tensions between
firm Smartkarma to roll out consultation on proposed
C-Suite Pilot Program - 12 March safeguards for dual class share
US with China, Europe and
2018 listings, SGX rolled out the Canada.
implementation on 26 June
2018.
With the introduction
of dual-class shares
structures, SGX is now
SGX RegCo launches SGX Fast Singapore Exchange (SGX) and
in a position to support
Track programme for companies Tel-Aviv Stock Exchange (TASE)
with good corporate governance Establish Partnership to Grow high-growth companies
standing - 4 April 18 Cross-Border Capital Raising
and attract blockbuster
Opportunities for Technology
Companies – 14 May 2018 listings from around the
world, while broadening
investment options for
Macro factors investors and adding to
the vibrancy of Singapore’s
capital market. We are
Trade Tariffs
Iran sanctions by
cautiously optimistic that
between USA
and China, EU
the U.S. affecting
oil prices
Singapore’s IPO market will
and Canada
continue to do well in 2018
Fed Rate hikes
(two hikes in
Singapore
GDP is
H2.”
March and June expected
2018, with two growth of
more hikes 3% for full Ms Tay Hwee Ling, Global IFRS and
expected in Macro factors year 2018 Offerings Services Leader, Deloitte
2018) that may have an
Singapore, 5 July 2018
impact on the
Singapore capital Uncertain
Competition market policies and
from regional directives from
and global U.S.
bourses administration
11Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities. DTTL (also referred to as “Deloitte Global”) and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more. Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services. Our network of member firms in more than 150 countries and territories serves four out of five Fortune Global 500® companies. Learn how Deloitte’s approximately 264,000 people make an impact that matters at www.deloitte.com. About Deloitte Southeast Asia Deloitte Southeast Asia Ltd – a member firm of Deloitte Touche Tohmatsu Limited comprising Deloitte practices operating in Brunei, Cambodia, Guam, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – was established to deliver measurable value to the particular demands of increasingly intra-regional and fast growing companies and enterprises. Comprising approximately 340 partners and 8,800 professionals in 25 office locations, the subsidiaries and affiliates of Deloitte Southeast Asia Ltd combine their technical expertise and deep industry knowledge to deliver consistent high quality services to companies in the region. All services are provided through the individual country practices, their subsidiaries and affiliates which are separate and independent legal entities. About Deloitte Singapore In Singapore, services are provided by Deloitte & Touche LLP and its subsidiaries and affiliates. Deloitte & Touche LLP (Unique entity number: T08LL0721A) is an accounting limited liability partnership registered in Singapore under the Limited Liability Partnerships Act (Chapter 163A). © 2018 Deloitte & Touche LLP
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