Singapore IPO Capital Market2021 Mid-Year Report

July 2021

Singapore IPO Capital Market | 2021 Mid-Year Report

02

2018 H1 2018 H2 2019 H1 2019 H2 2020 H1 2020 H2 2021 H1

Catalist 6 6 6 1 4 2 2

Mainboard - 2 - - - 3 1

Mainboard REIT or Trust

1 - 2 2 2 - -

Overview of 2021 H1: IPOs on SGX

Singapore saw 3 IPOs in 2021 H1, with S$337 million in proceeds raised and an IPO market capitalisation of S$1.11 billion (excluding secondary listing) on the Singapore Exchange ("SGX"). This registered a 53% drop in funds raised from 2020 H1 which had 6 IPOs with S$712 million proceeds and an IPO market capitalisation of S$1.19 billion.

0 200 400 600 800

1,000 1,200 1,400 1,600 1,800

IPO Amount Raised (S$’m)2018 H1 to 2021 H1

2018 H1 2018 H2 2019 H1 2019 H2 2020 H1 2020 H2 2021 H1

Catalist Mainboard Mainboard REIT or Trust

0

500

1,000

1,500

2,000

2,500

3,000

2018 H1 2018 H2 2019 H1 2019 H2 2020 H1 2020 H2 2021 H1

IPO Market Capitalisation (S$’m) 2018 H1 to 2021 H1

Catalist Mainboard Mainboard REIT or Trust

126 49

1,467 1,578

10 35

677 619

314

9 23134

422

48

642286

223 57 121

969 990

2,628

590

1,340

310

1,861 2,141

64

548

182

1,516 1,588

712 628

337

1,982

900

2,147 2,205

1,192

2,685

1,111

There are SGX Mainboard listing in recent periods. This presents a positive outlook that sizeable local companies continue to consider IPO on the local exchange. Notwithstanding that, with news of a possible blockbuster REIT listing by City Development Limited (CDL) targeted in Q3 of 20211, we expect REITs and Business Trusts will continue to have significant presence on SGX.

1 Source from CDL Holding Announcement on 4 June 2021

Of the three listings in 2021 H1, two Catalist IPOs raised a total of S$23 million, while the sole Mainboard listing raised S$314 million.

The funds raised in 2020 H1 were mainly contributed by two Real Estate Investment Trusts (REITs) which raised a total of S$677 million. Excluding the two REITs in 2020 H1, the gross amount raised by the four Catalist listings was S$35 million.

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Overview of 2021 H1: IPOs on SGXThree IPOs on SGX: two Catalists and one Mainboard

# Company Listing

PlatformDate of Listing

P/E ratioAmount raised (S$’m)

Market cap(S$’m)

Offer price(S$)

Share price as at 30

June 2021 (S$)

% changeNature of business

Country of main

operations

1Aztech Global Ltd.

Mainboard 12-Mar-21 16.80 314 990 1.28 1.28 - ConsumerSingapore, China and Malaysia

2Econ Healthcare (Asia) Limited

Catalist 19-Apr-21 14.35 14 72 0.28 0.34 +21.4%Life Science

and Healthcare

Singapore and

Malaysia

3OTS Holdings Limited

Catalist 17-Jun-21 13.86 9 49 0.23 0.34 +47.8% ConsumerSingapore, Malaysia, Indonesia

337 1,111

As at 30 June 2021, there was one lodgement on Catalodge, Audience Analytics Limited.

Of the three listings in 2021 H1, AZTECH GLOBAL LTD. SINGAPORE and ECON HEALTHCARE (ASIA) LIMITED previously delisted in 2017 and 2012, respectively, and have re-listed in 2021.

One secondary listing on the SGX:

Case study of Sri Trang Gloves (Thailand) on SGX • Manufacturer and distributor of rubber gloves for medical and other industries use. • Largest in Thailand and third largest in the world. • Three production plants with 147 production lines and installed capacity of 33.3 billion pieces of gloves per year. • Upon the announcement of secondary listing on SGX, the share price rose by 2.82%.

Case Study: Listing of Sri Trang Gloves

(Thailand)

Why

Singapore

?

Listed on 2 Ju

ly

2020 Stock

Exchange of

Thailand (S

ET)

Waivers

Granted

SGX Secondary

Listing on

10 May 2021

“With Sri Trang’s successful dual primary listing on the Singapore Exchange today, we have accomplished our mission of heightening our profile as well as to enjoy greater investor recognition from the global institutional investors based here. Our listing also solidifies our Group’s position in Singapore, a purchasing hub for key users of natural rubber, where we have a presence since April 2002 when we established Sri Trang International for the distribution of the Natural Rubber Products that we sell to customers globally.” - Viyavood Sincharoenkul, Chairman and Managing Director of Sri Trang Agro- Industry Public Company Limited.

The Company’s controlling shareholder Sri Trang Agro-Industry Public Company Limited is also secondary listed on SGX.

SGX consider waivers for companies on a case by case basis. Sri Trang Gloves (Thailand) were granted a few waivers to shorten the secondary listing process from the time of application to the official listing on SGX.

Sri Trang Gloves (Thailand) PCL listed on the Mainboard of SGX on 10 May 2021 via an introductory listing.

Singapore IPO Capital Market | 2021 Mid-Year Report

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Secondary listings on SGXProminent secondary listings on SGX

Enhance profile and visibility with Singapore's political stability

Building presence in Southeast Asia market

Time and cost efficient with a streamlined Secondary Listing Process on SGX

Added avenue to increase the trading activity and extended trading hours for trading in different time zones

Greater access to capital and reduce barrier to foreign or global investors

Diversification of investor base

Advantages

Note: The principal place of business is indicated beside the company name

Stock Exchangeof Thailand

• Sri Trang Gloves (Thailand)

• Sri Trang Agro – Industry (Thailand)

Bursa Malaysia

• IHH Healthcare (Malaysia)

• Top Glove Corp (Malaysia)

Hong Kong Exchange

• Shangri-la Asia (HK)

Korean Exchange

• Pan Ocean Co (Korea)

Japan Exchange

• Murata Manufacturing (Japan)

New York Stock Exchange

• AMTD International (HK)

London Stock Exchange

• Prudential (UK)• Jardine Matheson Holdings (HK)• Hongkong Land Holdings (HK)• Dairy Farm International

Holdings (HK)• Mandarin Oriental (HK)

Swiss Exchange

• Lonza Group(Switzerland)

Jardine Group of Companies see 99% of trading occurs on SGX, due to established Asian brands and investor recognition.

Singapore IPO Capital Market | 2021 Mid-Year Report

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2021 IPO performance in Southeast AsiaThe Southeast Asia2 market achieved 59 IPOs in 2021 H1, with US$5.97 billion in proceeds raised and an IPO market capitalisation of US$22.44 billion (excluding secondary listing) as compared to 2020 H1 with 46 IPOs, US$2.61 billion proceeds and an IPO market capitalisation of US$11.23 billion.

Other prominent listings in Southeast Asia in 2021

2 Southeast Asia countries includes Singapore, Thailand, Malaysia, Indonesia, Vietnam and Philippines.

Despite only a 28% increase in the number of new IPOs, the Southeast Asia IPO sees a 129% increase in funds raised and 100% increase in market capitalisation from 2020 H1 in 2021 H1, giving a strong signal that the Southeast Asia market continue to attract new exciting large-cap companies with higher valuation in the Southeast Asia IPO market.

2018 H1 2018 H2 2019 H1 2019 H2 2020 H1 2020 H2 2021 H1No. of IPOs 66 85 65 96 46 68 59Amount raised (US$'b)

36.75 9.33 4.97 20.19 11.23 17.90 22.44Market Cap (US$'b)6.33 3.19 2.01 5.33 2.61 4.40 5.97

0

20

40

60

80

100

0

5

10

15

20

25

30

35

40

45

No

of IP

Os

Amou

nt ra

ised

/ M

arke

t Cap

(US$

'billi

ons)

No. of IPOs Amount raised (US$'b) Market Cap (US$'b)

MONDE NISSIN• Listed on Philippines Stock

Exchange in June 2021• Amount raised: US$1 billion • Market Cap: US$5 billion

MEGAWORLD CORPORATION• Megaworld Corp. plans to raise

as much as P27.3 billion (US$0.55 billion) from the potentially largest REIT IPO to come to the local stock market.

PTT OIL AND RETAIL BUSINESS PUBLIC COMPANY LIMITED • Listed on SET in February 2021• Amount raised: US$1.78 billion• Market Cap: US$6.89 billion

CITY DEVELOPMENTS LIMITED (upcoming) • CITY Developments Limited (CDL) has

submitted relevant applications for a “proposed initial public offering and listing of a real estate investment trust on the Singapore Exchange Securities Trading Limited.“

Singapore IPO Capital Market | 2021 Mid-Year Report

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Market volatility driving a desire for

more valuation certainty through a negotiation with

one buyer

Accelerated timeline to going

public in uncertain times

Larger SPACs chasing more

mature companies

A SPAC has a defined life of 18–24

months to consummate an acquisition—this

period can be extended up to a maximum of 36

months with shareholder

approval

SPAC listings in the United States ("U.S.")U.S. SPAC performance

SPAC IPO Count

Gross Proceeds (US$'m)

Average IPO Size (US$'m)

2016 13 3,499 2692017 34 10,049 296 2018 46 10,752 2342019 59 13,600 2312020 248 83,019 3362021 339 106,400 314Source: SPAC Research, public news

Time Left to Complete an Acquisition No of SPACs

Less than 6 months 44

6-12 months 75

13–18 months 150

19–24 months 302

Total 571

As of June 14, 2021 there are 571 SPACs with US$179 billion in funding, yet to complete an acquisition.

Key observations from U.S. SPACs

A record breaking 2021

• The biggest quarter ever by proceeds: 1Q 2021, 298 SPACs and US$97 billion

• 1H 2021 saw more SPAC IPOs and proceeds raised than in the entirety of 2020

• The largest SPAC ever to go public: Pershing Square Tontine US$4 billion raised

• The largest announced SPAC merger: Grab and Altimeter Growth Corp (US$40 billion)

• Significant SPAC deal activity in the electric vehicle sector - Nikola, Fisker, Canoo, Lordstown Motors, XL Fleet and ChargePoint

Of these 571 active SPACs, 149 have announced business combinations and 422 are seeking targets. We expect to see more SPAC acquisitions in the coming year.

The benefits of SPACs is the speed to listing, as opposed to a traditional IPO which requires a longer process.

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A special purpose acquisition company (SPAC) is a company with no commercial operations, formed strictly to raise capital through an initial public (IPO) for acquiring an existing company. It is also known as "blank check companies“.

Proceeds from its IPO will be held in a trust account and cannot be used for any purpose other than:

• Funding a De-SPAC transaction

• Redeeming the shares sold to the public shareholders in the IPO 

Blank check shell company

+ =Target operating

companyPublic listed

operating company

Listed "Successor" Company

Target Company/Business/Assets

Listed "SPAC"

Special Purpose Acquisition Company (SPAC)What is a SPAC?

SPAC VS Traditional IPO

An acquisition-based event in which capital raised from SPAC investors is used to legally acquire or merge with an existing private operating company

Nature A capital raising event which new shares of a private company are offered publicly for proceed

Depends on deal size, industry, upside potential and quality management team

Suitability of company

Depends on growth prospect, industry and leadership team

Must be completed within a defined time (usually 18 or 24 months) or the SPAC investors can redeem their original investors

Timing Driven by market conditions and company’s readiness. No defined timing, going public can last from a few months to many

Investors know the SPAC price and rights when they buy Share price Investors know the price a day before the IPO

Agreed price is negotiated between the sponsors and sellers

Valuation Depends on market demand

No marketing roadshow of the private operating company (target); the shareholder vote to demonstrates marketability

Marketing Underwriters market new shares through testing the waters and pre-trading roadshows to generate investor interest

No heavy underwriting or roadshow costs to market the private operating company

Cost Underwriters and roadshow costs applicable but absorbed by offering proceeds.

Typical challenges Success during sustainment often happens with the following, which companies typically need assistance with:

Company experience and resources

• Lack experience with public company requirements

• Lack familiarity with the complex rules related to de-SPACs

• Strong understanding of regulatory compliance requirements and accounting standards

• Upskilling of current resources and/or talent acquisition

Process, rules and regulations

• Adhering to rules and requirements while balancing a compressed timeline

• Access to historical financial information

• Tax structuring and compliance

• Organised and streamlined financial close process for periodic reporting cycles

• Clear governance procedures

• Efficient and effective relationship with external auditor

Technology and systems

• Systems which may not be able to adequately support the reporting requirements under exchange’s listing rules and complicating the financial statement preparation process

• Upgraded accounting and/or ERP systems to support public company reporting, internal controls, and forecasting

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SPAC listing on SGX

Broad admission criteria

• >S$300 million market capitalisation 

• >25% of total number of issued shares to be held by at least 500

public shareholders at IPO• >S$10 a share (IPO Price)

• >90% of IPO proceeds placed in escrow pending the acquisition of a target

companyConditions for

founding shareholders,

management team and controlling shareholders

Minimum equity at IPO of between 1.5% to 3.3% held by founding

shareholders and/or the management team

Business combination requirements

3-year permitted time frame from IPO date to complete the

business combination Business combination can only proceed with approval from a simple majority of the SPAC’s

independent directors and independent

shareholders

For more detailed listing framework proposed for SG SPAC:

https://www.sgx.com/regulation/public-consultations/20210331-consultation-paper-proposed-listing-framework-special

Speed • SPAC IPOs have no historical financial results to disclose or assets to describe.

• Listing reviewing process focuses on the sponsor’s track record and reputation.

• IPO process can be completed more quickly than traditional operating companies (as quickly as 8 weeks).

Flexibility • Asset owners have the flexibility to identify their portfolio assets as a business combination target before they list a SPAC as a sponsor.

Longer Timeframe to De-SPAC • A longer timeframe of maximum 3 years from the date of listing to complete the business combination.

• This gives the SPAC more time to search, select and negotiate an appropriate business target in the best interest of its shareholders.

Advantages of Singapore SPACs

SGX issued a Consultation Paper on SPAC regulations in March 2021. Here are the key highlights:

“SPAC listings have attracted interest in major markets due to their speed to market and ability to offer price certainty in valuing target companies. SPAC listings provide an additional option to listing aspirants to tap on the capital market for their business needs and we expect to see interest from investors in the region.”

Ms Tay Hwee Ling, Disruptive Events Advisory Leader, Deloitte Southeast Asia and Singapore

Singapore IPO Capital Market | 2021 Mid-Year Report

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Contact usFor more information about fund raising and tapping the capital markets, please contact any of our partners.

Tay Hwee LingPartner Leader, Disruptive Events Advisory Southeast AsiaSoutheast Asia and Singapore+65 6216 3258hwtay@deloitte.com

Darren NgPartnerDisruptive Events Advisory Singapore+65 6216 3360dang@deloitte.com

Jack TeyPartnerDisruptive Events Advisory Singapore+65 6216 3171jtey@deloitte.com

Ronny ChandraPartner Disruptive Events Advisory Singapore+65 6216 3103rochandra@deloitte.com

Paul YangDirector Disruptive Events Advisory Singapore+65 6216 3322payang@deloitte.com

Priscilla MaoPartnerDisruptive Events Advisory Singapore+65 6530 5552prmao@deloitte.com

Angelia ZhangDirectorDisruptive Events Advisory Singapore+65 6530 8007angeliazhang@deloitte.com

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