MORNING CALL: 5/9/23

Is TA Securities bullish or bearish on Mercury Securities IPO?

Transcript

00:00 This Tuesday, we take a look at the listing of Mercury Securities, a bit of a unicorn

00:05 since it's the first stockbroker to go public in 20 years.

00:08 TA Securities doesn't have a rating on it, but it has a 28 cent target price.

00:13 A little KYC, Mercury Securities is an investment holding company with subsidiaries principally

00:18 involved in stockbroking, corporate finance advisory and other related businesses, as

00:23 well as the provision of nominee and custodian services.

00:26 It is due to be listed on the ACE market later this month and looks to raise around RM39

00:31 million.

00:32 It has an established track record in stockbroking business and under its corporate finance arm,

00:37 it provides an advisory services focusing on fundraising through IPOs.

00:42 Mercury Securities is looking to expand its revenue by growing the provision of margin

00:46 financing facility services to fund the existing and new stockbroking clients for their purchase

00:51 of mainly quoted securities on Bursa Securities.

00:54 The group is earmarking RM2.88 million to enhance the digitalization program for its

00:59 stockbroking operations.

01:00 TA Securities estimates the group to record a 30.4% year-on-year decline in FY23 earnings

01:07 of RM12.3 million due to lower placement fees and lower utilization of margin financing

01:13 facility services.

01:15 Given that it hasn't been listed, there is no consensus data on Bloomberg and so based

01:18 on TA Securities' target price of 28 cent, this implies a possible 12% upside from its

01:23 listing price of 25 cent.

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