Cambodia Investment Review
Cambodia’s developing stock market is poised for a significant leap forward as CAMGSM Plc. (Cellcard), prepares for one of the largest Initial Public Offerings (IPOs) in the exchanges 11-year history, hosting its nationwide roadshow next month.
As a leading mobile network operator with over 4 million customers, Cellcard’s listing on the Cambodia Securities Exchange (CSX) is expected to attract further attention from local investors about the stock market as well as increase stubbornly low liquidity in the market. The listing comes amidst positive growth signs for 2023, despite global economic headwinds and rising borrowing rates.
CAMGSM’s IPO presents a unique investment opportunity with a guaranteed dividend of 7% per annum for five years and quarterly dividend distributions for Class A voting shares. This offering has been described as unparalleled by the stock’s underwriter, SBI Royal Securities.
Established in 1996, CAMGSM is owned by Royal Millicom Co., Ltd and Neak Oknha Kith Meng, and its primary activities include marketing and selling telecommunications products and services in Cambodia.
The subscription period for the IPO began on April 5, 2023, and is open exclusively to CAMGSM customers with valid Cellcard SIM and ID registration. The opening share price is KHR 2,270 (approx. $0.57), with a minimum subscription amount of KHR 400,000 (approx. $100). The estimated market capitalization for CAMGSM is $1.14 billion.
Strong financial growth over three years
Recent financial performance showcases strong growth for the company. Its 2022 unaudited management account revealed an 11.27% increase in revenue, reaching $189.95 million. EBIT, EBITDA, and net profit also saw strong growth over the last three years.
If fully subscribed, CAMGSM will trade at approximately 15 times its 2022 EBITDA of $78.11 million, considered on the higher side for the telco industry. The price-to-earnings ratio will be around 23 times its 2022 net profit of $49.99 million, deemed a “fair” valuation for a growing company.
The IPO offers the longest guaranteed dividend yield ever at five years and the highest guaranteed dividend of 7% per year for Cellcard investors. Furthermore, it is the first-ever guaranteed dividend distribution by quarter, ensuring consistent returns for investors.
To participate in the IPO, eligible subscribers must submit their subscription applications along with 100% of the subscription amount. The collection of intention or expression of interest from the public is non-binding and is intended to provide an indicative intention before the actual subscription period.
CSX forecasts record daily trading volumes
The Cambodia Securities Exchange (CSX) has outlined record growth for the exchange in 2023, forecasting 14 new firms to list, doubling its daily trading volumes, and tripling the number of registered trading accounts, according to its latest annual outlook. CSX believes that domestic credit growth remains strong, and the exchange rate is stable while domestic revenue growth has now fully recovered.
Read more: CSX forecasts record growth for Cambodia’s capital markets in 2023
The securities market has experienced a new stronger wave of interest from conglomerates, new-generation entrepreneurs, and local investors, both individuals and institutions. Digitalization has enabled easier access to and more inclusive capital markets.
The government bond market has been emerging, and tax incentives for securities market participants remain intact. New initiatives promoting liquidity and new product development have been well laid out.
This IPO, along with the ambitious targets set by the CSX, highlights the potential for growth in the Cambodian capital market. The recent trends in domestic credit growth, exchange rate stability, and domestic revenue growth recovery support this optimistic outlook.
The roadshow for CAMGSM’s IPO will run from May 2 to May 27, featuring stops in Sihanoukville, Phnom Penh, Battambang, and Siem Reap. This event will provide potential investors with a valuable opportunity to gain more insight into the company’s operations and future plans, as well as to understand the investment potential of the IPO. Click here to find out more.
