Many local technology and IT-related firms are gearing up to launch initial public offerings (IPOs) on the Stock Exchange of Thailand (SET) in 2025 or 2026, emphasising strategies for business expansion and cost reduction.
The list includes Southeast Asia e-commerce enabler aCommerce, on-demand super app Line Man Wongnai, provider of construction software-as-a-service Builk One Group, and IT retailer JIB Computer Group Co.
Bluebik Group Plc, a consultancy on digital transformation listed on the Market for Alternative Investment (MAI), plans to transfer its listing to the SET in 2025.
SOLID FOUNDATION
Paul Srivorakul, group chief executive of aCommerce, told the Bangkok Post the company aims to list on the SET next year as it is on the path to profitability.
The company will capitalise on the next wave of e-commerce, where large retailers make their own e-marketplaces, he said.
"We broke even on adjusted earnings before interest, tax, depreciation and amortisation for three consecutive quarters, culminating in our first net income profit in the fourth quarter of 2023," Mr Paul said.
This financial performance sets a solid foundation for sustained profitability and growth in 2024, he said.
"With the company profitable, we feel investors will be interested in becoming shareholders," said Mr Paul.
He said aCommerce will use the market capitalisation track for its listing criteria, meaning the SET's new listing regulations starting in January 2025 will not affect its listing.
Mr Paul says aCommerce aims to list on the SET by 2025 as it is on the path of profitability.
The company's business grew by 18.6% in 2023, surpassing the e-commerce sector's gross merchandise value growth rate of 7%.
ACommerce is expected to grow at a similar rate this year because of its investment in technology and artificial intelligence (AI), said Mr Paul.
According to a Google Temasek "E-conomy" report, e-commerce in Southeast Asia was worth US$139 billion in 2023 and is expected to grow at a compound annual growth rate of 16% to $186 billion by 2025, when the company plans to list, he said.
"We are a profitable, Thai homegrown technology company that is leading the way for more Thai tech companies to enter the public market," said Mr Paul.
TIMING IS EVERYTHING
The timing of the listing will be critical as the stock market and economy currently face headwinds, he said. Several IPOs have been postponed until next year and Mr Paul said he hopes the markets will recover by then.
The IPO can support aCommerce's growth through expansion of its e-commerce IQ unified omni-channel platform and commerce network, as well as the continued automation of its internal processes, he said.
The IQ platform manages clients' businesses from end-to-end.
Omni-channel retailers are asking aCommerce to help them source brands for their marketplaces. Connecting these retailers and brands is what the company describes as the commerce network.
"We will also invest in integrating AI across all our operations, including the continued development of our AI chat-to-analytics natural language product we are launching at the end of May," said Mr Paul.
The IPO will provide liquidity for existing shareholders and widen the company's shareholder base to new domestic investors, he said.
The listing should also bolster credibility to facilitate expansion into new business areas and countries through acquisitions in Vietnam, said Mr Paul.
Next wave of growth
He said local omni-channel retailers are launching marketplaces to compete against the larger marketplace platforms. These new and niche marketplaces will become the next wave of growth in global e-commerce.
"We have a unique opportunity to support these omni-channel retailers in their marketplace transformation with enablement services, infrastructure and technology," said Mr Paul.
He said new commerce channels and technologies are evolving quickly, including social commerce, live video, generative AI and robotics.
"The plethora of new channels and opportunities is very attractive to our brand partners as they are searching for alternative sales channels, requiring new services and technology to drive revenue growth under the concept of 'sell anywhere'," said Mr Paul.
Over the past year, the company's long-term clients, specifically those acquired over the past three years, have recorded 24% year-on-year growth, he said.
This increase is the primary driver of the company's annual growth, said Mr Paul.
ACommerce also recorded a fourfold increase in its live commerce solutions. The company has 14 studios in operation across several markets.
Regarding competition from Chinese e-commerce enablers, he said several previously entered the market, but that trend has since subsided. Most players have either shut down or scaled back their operations for several reasons.
Southeast Asia is a substantially different market from China, with consumer preferences, logistics requirements and the fragmentation of infrastructure platforms making it a difficult market to enter, said Mr Paul.
Performance growth
Recently Yod Chinsupakul, chief executive of Line Man Wongnai, said the company expects to launch an IPO on the SET by the third quarter of 2025 at the earliest.
Mr Yod said the company's business grew last year and should continue in 2024.
The company's food business exceeded the industry growth rate because it offers varied items and price points, he said.
Line Man Wongnai's food delivery platform aims to have 50 million users in the long term, up from 26 million at present, said Mr Yod.
According to a Bloomberg report quoting people with knowledge of the matter, Line Man Wongnai could raise around 10 billion baht from a listing.
The app business is working with local advisors, including Kasikorn Securities and Kiatnakin Phatra Securities.
Somyot Chaowalit, chief executive of JIB Computer Group, said the company originally planned to launch an IPO several years ago, but postponed the plan because the bourse was dealing with unfavourable factors.
The company might consider an IPO in 2026, pending favourable macro-economic conditions, he said.
"We could postpone listing from 2025 until 2026 as macro factors affect the stock market," said Mr Somyot.
He said the company would offer no more than 25% of the total shares to the public in order to control management policy. Proceeds from the IPO would be used to increase the company's liquidity, reduce financial cost and increase online revenue, as well as raise its credibility when engaging in project-based businesses, said Mr Somyot.
JIB Computer wants to wait until the SET index reaches 1,500 points to launch its IPO, he said.
LOWER PRICES
Yuanta Securities analyst Supachai Wattanavitheskul said local listed tech companies do not have a high share price, unlike tech firms listed in the US or China, as Thailand is a small market and does not possess a huge amount of skilled personnel to support the tech sector.
However, several medium-sized local system integrators and tech consultancies have launched IPOs, providing decent investment returns, such as Bluebik Group on the MAI, said Mr Supachai.
He said investors will focus on whether a company has high growth potential more than profitability prior to an IPO, though ultimately a company needs to become profitable.
Meb Corporation, an e-book provider, received a warm welcome from investors when its listed on the SET early this year, said Mr Supachai.
Patai Padungtin, chief executive of Builk One Group, said the company plans to expand its business by launching an IPO next year.
The company plans to increase the proportion of recurring income prior to launching the IPO, he said.
Builk One Group raised an undisclosed amount of Series B funding from investors, including Siam Cement Group, Krungsri Group's corporate venture capital arm Krungsri Finnovate, and BCH Ventures, a subsidiary of Thai telecom behemoth Benchachinda Group.
Meanwhile, Bluebik Group's board approved an increase this month in the company's paid-up capital from 50 million baht to more than 100 million to comply with the SET's new listing requirements.
Chief executive Pochara Arayakarnkul said listing on the SET would strengthen Bluebik's image when bidding for large projects and support its business expansion in the local and overseas markets.
The company is confident about its growth outlook this year. Bluebik posted a net profit of 303 million baht last year, up 132% year-on-year, said Mr Pochara.
Sam Tanskul, managing director of Krungsri Finnovate, said many local tech startups want to launch IPOs on the SET during 2025-2026, including Line Man Wongnai in 2025 and Finnomena in 2026.
If the IPOs are successful, it should inspire others to enter the startup industry, he said.
Mr Sam said the companies planning to launch an IPO have been operating for 8-10 years and are profitable. They can use the funds raised to expand their businesses, particularly in the regional market, which would make their stocks more attractive to investors, he said.
Startups can consider going public if they are both sustainable and profitable, said Mr Sam.
In the US and China, he said startups who launch IPOs tend to use the proceeds to acquire smaller startups, strengthening their ecosystem or a similar business segment overseas to quickly expand.
Mr Sam said high interest rates could pose a challenge to tech companies planning an IPO.
He said he expects rates to dip by the end of this year.