IPOs, or initial public offerings, represent a great way for companies to raise funds through the capital markets.
However, the success of an IPO hinges on market conditions.
When markets are volatile and valuations plunge, companies become hesitant to sell shares as they cannot raise as much money compared to when times are good.
2022 has been a tough year for markets with both the NASDAQ Composite Index and S&P 500 Index falling into a bear market.
Although the Straits Times Index (SGX: ^STI) has traded in positive territory thus far, rising interest rates have put a dampener on listings.
Accounting firm Deloitte reported that there were nine IPOs in the first 10 and a half months of 2022 that raised a total of S$580.4 million.
Of these, three were mainboard IPOs while the remaining six were on Catalist.
IPOs, however, do not include secondary-listed companies such as vehicle manufacturer Nio Inc (SGX: NIO) and liquor giant Emperador Inc (SGX: EMI), which offer a wider choice of stocks for investors.
Here are five newly-listed stocks in 2022 that could end up on your buy watchlist.
Vertex Technology Acquisition Corporation Ltd (SGX: VT1)
Heading the list is Vertex Technology Acquisition Corporation, or VTAC, which raised S$208 million back in January this year.
VTAC is a special purpose acquisition company, or SPAC, that sold shares at S$5 apiece.
A SPAC is a blank-cheque company that has 24 months from the time of its IPO to find a suitable acquisition target.
VTAC’s sponsor is Vertex Venture Holdings Ltd, a unit of investment firm Temasek Holdings.
With January 2023 almost upon us, the SPAC has another 12 months to source for a suitable acquisition target, after which it can apply for another 12-month extension subject to the fulfilment of certain conditions.
VTAC last traded at S$4.52, down from its IPO price of S$5.
iWOW Technology Limited (SGX: NXR)
iWOW is a technology provider specialising in integrated wireless Internet of Things (IoT) solutions as a service.
The manufacturer of the TraceTogether token used during the pandemic went public in April this year, raising a total of S$6.5 million by selling 26 million shares at S$0.25 apiece.
The group announced a mixed set of financial numbers for its fiscal 2023’s first half ending 30 September 2022.
Revenue dipped 3% year on year to S$17.1 million but net profit surged by 54% year on year to S$2.4 million.
iWOW recently announced the acquisition of Roots Communication Pte Ltd, a telecommunications service provider.
The purchase is expected to enlarge iWOW’s customer base and extend its regional presence.
LHN Logistics Limited (SGX: GIH)
LHN Logistics is a logistics company with two main business segments – transportation, and container depot services.
The company has operations in Singapore, Malaysia and Thailand and is the logistics arm of LHN Limited (SGX: 41O) (SEHK: 1730), a real estate management group.
LHN Logistics offer 25.2 million placement shares at S$0.20 each and raised gross proceeds of S$5 million.
For its fiscal 2022 ending 30 September, the group reported flat revenue at S$27.3 million.
An increase in the cost of sales and expenses resulted in a lower year on year gross profit and a net loss of S$3.2 million.
LMS Compliance Limited (SGX: LMS)
LMS Compliance is a testing and certification services provider that offered 14 million placement shares worth S$0.26 apiece.
The Malaysian company, which was founded in 2006, raised around S$3.6 million.
It provides testing and certification services to the food, fertiliser, pharmaceuticals and medical devices industries.
As of September, LMS Compliance offers more than 1,100 accredited tests and 10,200 non-accredited tests.
Noontalk Media Limited (SGX: SEJ)
Noontalk Media looks set to the last IPO for 2022, capping the count to 11 for the year as it debuted in late November.
Noontalk is a Singapore-based media entertainment company with businesses in artiste and talent management, multimedia production, and event conceptualisation.
The company’s IPO offered 22 million shares at S$0.22 apiece to raise S$4.8 million.
Of these, 4.5 million shares were offered to the public.
Anchor investors for the placement tranche include energy supplier Union Energy Corporation, Lim Hock Leng, the managing director of Sheng Siong Group (SGX: OV8), and a family office called Qilin Wealth Fund.
Get Smart: 2023 beckons
There was a noticeable dearth of REIT listings in 2022, with the last two REITs listed on the local bourse being Daiwa House Logistics Trust (SGX: DHLU) and Digital Core REIT (SGX: DCRU) back in November and December 2021, respectively.
As 2023 beckons, investors could see some activity in this area.
Mapletree Investments had bandied the idea of listing a student accommodation REIT earlier this year.
However, City Developments Limited (SGX: C09) has paused its planned UK commercial property REIT IPO until business conditions improve.
If interest rate increases ease next year, we could see the return of more IPOs in the market, including some involving REITs.
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Disclaimer: Royston Yang owns shares of Digital Core REIT.