Mercury Securities Group Berhad (“Mercury Securities” or “Company”), unveiled its prospectus today in conjunction with its initial public offering (“IPO”) and listing on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).
According to Mercury Securities Managing Director Chew Sing Guan, this is the first stockbroking company to seek and gain an IPO listing in Bursa in the last 20 years.
“It is a testimony of how well we are doing and we qualify for the Main board. But we chose the ACE because the main market has a minimum RM0.50. We want to price it lower to make it affordable to younger investors and make it a people’s company,” said Chew.
He added, “Mercury has been profitable every single year since it started operations in 1992, despite the ups and downs of the stock market. We will be the first stockbroking company to seek and gain an IPO listing in Bursa in the last 20 years.”
Post listing, he predicts better revenue generation from the margin financing component. He said this is likely due to the component registering a compounded annual growth rate of 36% from FY2019 to FY2022.
In FY2022, Mercury Securities’ stockbroking business made up 69.7% of revenue while corporate financing contributed 30.27%.
Mercury Securities is an investment holding company and through its wholly-owned subsidiary, Mercury Securities Sdn Bhd (a Participating Organisation of Bursa Malaysia Securities Berhad and a Recognised Principal Adviser by the Securities Commission Malaysia) (collectively “Group”) is principally involved in the provision of stockbroking, corporate finance advisory services and other related businesses such as margin financing facilities services, underwriting and placement services, as well as provision of nominee and custodian services.
The IPO is projected to raise RM39.27 million via the issuance of 157.09 million shares at the issue price of RM0.25 per share. The proceeds will be allocated in the following manner:
• RM26.86 million used for margin financing facility services;
• RM2.88 million used for enhancement of digitalisation programme and marketing activities for the stockbroking business and operations of the Group;
• RM4.63 million for working capital; and
• RM4.90 million for estimated listing expenses.
Managing Director of Mercury Securities, Mr. Chew Sing Guan said, “We plan to leverage this listing to continue to innovate, digitise and expand our product and service offerings. With our diverse range of products and services that we now offer, which include stockbroking, corporate finance, proprietary trading, margin financing and research advisory, custodian and nominee services, we are embarking on a journey that is not just a corporate milestone, but a springboard for our group to reach higher and deeper into the capital market.”
According to Chew, Mercury Securities is using internally generated funds to give out credit facilities, but the IPO proceeds will give greater allocation to expand the provision of margin financing facility to its existing and new stockbroking clients.
He said this in turn will help further enhance revenue for the stockbroking segment via margin income in addition to brokerage fees generated from purchase and sale of quoted securities made by margin clients.
On the corporate finance segment of the business, Chew said the IPO component is currently the most profitable part. Mercury Securities is currently engaged with eight more companies to assist them on their listing journey.
He added that the improving economic condition and capital abundance in the market will increase demand for corporate finance advisory services in Malaysia.
Pursuant to the launch of Mercury Securities’ prospectus, applications for the Public Issue are open from today and will close on 5 September 2023 at 5.00 p.m. Mercury Securities is scheduled to be listed on the ACE Market of Bursa Securities on 19 September 2023.
Upon its listing on the ACE Market, Mercury Securities will have a market capitalisation of RM223.25 million based on the issue price of RM0.25 per share and its enlarged issued share capital of 893.00 million shares.
PIVB is the Principal Adviser, Sponsor, Sole Underwriter and Sole Placement Agent for this IPO exercise.