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Port’s IPO just months away

Chairman and CEO of Phnom Penh Autonomous Port Hei Bavy talks to the Post earlier this week in Phnom Penh.
Chairman and CEO of Phnom Penh Autonomous Port Hei Bavy talks to the Post earlier this week in Phnom Penh. Vireak Mai

Port’s IPO just months away

Cambodia’s second-largest port, Phnom Penh Autonomous Port, says it plans to have its initial public offering before the end of the year.

The Post’s Sorn Sarath sat down with the port’s chairman and CEO, Hei Bavy, this week to talk about the progress of the IPO and the company’s expectations for investor interest.

How is Phnom Penh Autonomous Port progressing towards its IPO?
The process of our IPO is 95 per cent complete. In general, we’re just waiting for the Securities Exchange Commission’s decision on whether we have done enough to qualify for the IPO. We will list early in November this year.

What are your expectations for the IPO?
This is a good question. As we are doers, a service provider, we hope that our services sell out. We are particular about quality and we are serious about pricing.

We think carefully about all the packages we offer, and we aim to sell out all our services.

But there also may be some concerns. Namely, why is the Phnom Penh Autonomous Port listing this time? When the market is narrowing and investors do not yet know a lot about investing in the Cambodian stock market.

Why has PPAP decided to list on the CSX?
When we talk about listing, there are several advantages for the state, the company and the investors, or shareholders.

Firstly, for investors, they buy the shares and can earn a dividend. They can compare that with putting their money in the bank to earn interest to determine which one is better.

For our company we have one major advantage: It means we have more money to invest.

How do you think PPAP shares will fair?
As a whole, we have a good product, we are in a good location and I think that our shares will sell out.

There are only two firms listed on the bourse and prices have dropped. Are you concerned that same thing could happen to your company?

In general, we know that for Phnom Penh Water Supply Authority and Grand Twins International trade activity has not progressed well and their price has been low, but I think that the reason is not just from the companies themselves.

As I mentioned, entering the stock exchange we have to get support from state.

The second thing is the company itself and underwriters as well. We have been discussing these issues.

We are service providers and we know what the consumer needs and our product will help us to gain market support.

After the IPO, what are the plans for expansion?
In the short-term, we will double our capacity. Now we have capacity for 150,000 TEUs (20-foot equivalent unit) and in 2018 we will increase that to 300,000 TEUs.

We’ve been studying details about ports along the river, and the second priority will be setting up the Tonle Bet Port.

Sihanoukville Autonomous Port will list on exchanges as well. Are you worried about the competition?
We are a sister company. We are under the government umbrella. We help each other and we compete with each other.

For example, in 2008, SAP had 85 per cent of the market share and we had 15 per cent, but now SAP has 71 per cent while we have 29 per cent.

Indeed, Phnom Penh Autonomous Port’s IPO is ahead of the plan. We started preparing for the IPO in early 2014, while SAP started in 2011, but may have had some obstacles.

This interview has been edited for length and clarity.

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