Sihanoukville Autonomous Port (SAP) is edging closer to be listed on Cambodia’s burgeoning stock exchange after five years of delays. The state-owned enterprise will start a formal process of studying investor demand by April, to decide how much shares will cost when the company makes its initial public offering (IPO).
Ouk Somethy, SAP’s director of planning and statistics, said port officials and government representatives from the Ministry of Economy and Finance are working to finalise the IPO. “Book building” to determine the price of new shares will start before Khmer New Year, he added. “We anticipate selling 25 percent of total capital, worth about $38 million. Once we complete the book building, we will set the price per share,” he said.
Book building is a systematic process of generating, capturing, and recording investor demand for shares during an IPO.
Lamun Soleil, director of market operations at Cambodia Securities Exchange (CSX), said the delay in SAP joining the stock market stemmed from some internal issues. “CSX approved the listing eligibility review for the port one month ago. It will make another official request to be listed on CSX after finishing the subscription process,” he said, adding that book building for SAP will take about one month.
Svay Hay, president and CEO of brokerage firm ACLEDA Securities, welcomed the new addition to the stock market, which currently has four listings. “The market needs more listings, so SAP’s IPO will be an interesting contribution and attract more investors into the market and Cambodia, driving up trading,” he said.
According to Somethy, the price per share of SAP will be between 4,000 and 5,000 riel ($1 to $1.25).
Hay said the price is attractive. “Given the reasonable price in comparison to market averages, many will likely buy the shares, especially investors who take an earnings per share approach,” he said.
Sihanoukville Autonomous Port will be the fifth company to be listed on the CSX, joining Phnom Penh Water Supply Authority, Grand Twins International, the Phnom Penh Autonomous Port, and Phnom Penh Special Economic Zone.
As of December last year, SAP recorded a 1.86 percent increase in cargo shipments over 2015, while tonnage rose 4.45 percent to 3,930,787 tons, according to a Ministry of Public Works and Transport report. The state-enterprise earned about $53 million in revenue, a 3.38 percent increase on 2015.