As of Monday, the 13 companies listed on the bourse – seven stock-listed and six corporate bond-listed – have raised a combined $253 million. Hean Rangsey
DBD Engineering & Construction is set to go public via initial public offering (IPO), listing more than 6.4 million shares on the Cambodia Securities Exchange’s (CSX) Growth Board with plans to raise around $3 million to expand its business.
It will be the first company to go public on the CSX secondary board, which was launched in late 2015 to lift some of the barriers for listing and cater more to companies with less access to capital or financial resources.
Speaking at a virtual IPO roadshow on July 19, DBD managing director Neang Vithy said the company was established in 1995 to provide quality water, electricity and air conditioning services to hospitals and houses, which have garnered continuous support from customers.
DBD received final approval for the IPO from the Securities and Exchange Regulator of Cambodia (SERC) on June 24, he said, adding that the company had won the first iteration of the “Excellence Programme”, organised by the SERC in 2018.
He said DBD and underwriter SBI began organising “relevant work” in the fourth quarter of 2018.
“After hard work on the project, I strongly hope that DBD will receive the support of investors, which will allow DBD to take a successful step on the Cambodia Securities Exchange and expand its business potential,” he said, confirming that the offer period would be from July 26 to August 18.
SERC director-general Sou Socheat said DBD’s Growth Board listing is a success story and comes as the result of its efforts to overcome all manner of obstacles on the road to the IPO.
“DBD is the first company to enter the Growth Board, at a time when our country and other countries are fighting the spread of Covid-19.
“DBD’s move forward in listing on the Cambodia Securities Exchange’s Growth Board represents a strong will that we, the leaders of the Securities and Exchange Regulator of Cambodia, welcome and congratulate at the roadshow today.”
CSX CEO Hong Sok Hour noted that as of July 19, the 13 companies listed on the bourse – seven stock-listed and six corporate bond-listed – have raised a combined $253 million.
He stressed that the companies were not only able to access low-cost, long-term sources of capital, but also receive tax incentives from the government and gain prestige in the national and international markets, as well as a lot of confidence from customers, the public and investors.
He voiced hope that the listing would “set a good example for small- and medium-sized enterprises [SME] with potential to consider diversifying [funding] resources through the stock market”, he said, adding that this “indicates that the stock market is not only for large companies”.
“Having one or two sources of capital can put businesses at risk in some unpredictable situations, so I encourage potential companies to start diversifying and seize [the chance] to mobilise capital sources from the public through the stock market to strengthen and expand their business[es],” Sok Hour said.
The CSX has struggled to attract a single SME since the launch of its Growth Board. According to SERC regulations, companies are required to have a minimum of $500,000 in operating capital to list, compared to $7.5 million on the Main Board.
Companies that list on the platform are also required to release one year of audited financial results, compared to the two years required for bigger companies.
Additionally, the results must show a positive net profit or positive operating cash flow with gross profit margin of at least 10 per cent.
