IPO spotlight for Sarawak

KUCHING (Jan 25): Sarawak’s capital market landscape has shown signs of growth in 2025 as more homegrown companies made their way onto Bursa Malaysia amid the state’s accelerating development push.

Sarawak-based firms are typically viewed by investors as underrepresented in the public equity space, evidenced by years of sparse representation on the bourse.

That pattern is now starting to change as local companies leverage large-scale infrastructure spending, digitalisation initiatives and stronger earnings visibility to support public listings.

In 2025 alone, three Sarawak-based companies debuted across different market segments.

Most notably, Reach Ten Holdings Bhd marked a milestone by becoming the first Sarawak-based company in 15 years to list on Bursa Malaysia’s Main Market in May that year.

This was followed by Hartanah Kenyalang Bhd (Hartanah Kenyalang), involved in building construction and infrastructure, which listed on the ACE Market in June 2025; while Insights Analytics Bhd followed with an ACE Market listing in October 2025.

For these companies, the IPO route was not driven purely by fundraising needs. It was also seen as a step way to institutionalise operations, strengthen governance standards and position their businesses to take on larger projects.

Financial advisory firm Vision Group founder and group managing director Chua Zhu Lian said Sarawak’s growing presence in the capital market was not the result of a “magic switch”, but rather a convergence of policy intent, project visibility and proof of execution.

He said Sarawak’s development agenda has become increasingly bankable as the state commits real funding and structure to its programmes.

Initiatives such as large allocations for rural connectivity and the Sarawak Linking Urban, Rural, and Nation (Saluran) programme have created clearer and longer-term demand visibility for investors.

“When infrastructure such as towers and fibre routes becomes measurable, it becomes easier for companies to present a credible growth plan and for the market to price it,” he told Bizhive in an exclusive interview.

He added that the sequence of recent Sarawak listings has created a confidence loop as “credible listing case studies” encourage founders, advisers and investors alike.

“Founders believe it is doable, advisers build local capability, and investors gain familiarity,” he said.

Meanwhile, Insights Analytics managing director Frank Wee said the trend is supported by a combination of strong investor interest, improved access to capital and better market infrastructure.

He said successful early listings have demonstrated the tangible benefits of going public, helping more local firms see IPOs as a strategic growth option.

“While Sarawak’s contribution to total IPOs is still modest, the trend reflects a maturing ecosystem with increasing awareness and confidence in the capital markets,” he added.

Hartanah Kenyalang managing director Seah Boon Tiat shared a similar view, saying the Sarawak state government’s sustained push to build and upgrade infrastructure over the past decade has been crucial in creating more profitable local companies that meet listing requirements.

“Similarly, state initiatives to develop renewable energy, upgrade air and sea transport, construct new highways and roads, and enhance education and healthcare infrastructure have indirectly increased investor interest and visibility for Sarawak-listed companies,” he said.

The key shift in 2025 however, was not investor appetite for “digital” narratives, but the way infrastructure and digitalisation translated into clearer earnings visibility, Chua said.

Sarawak’s connectivity agenda, he noted, had moved beyond policy statements into funded and measurable programmes.

Saluran, for instance, was backed by an allocation of RM2.25 billion to improve statewide internet connectivity, while the SMART600 programme aims to build 600 telecommunications towers in two phases.

“What this does, from an IPO underwriting lens, is simple: longer-term rollout programmes tend to create longer-term workstreams, being building, integrating, maintaining, and upgrading.

“When companies can translate that into contracted revenue, or at least a credible pipeline with repeatable delivery, it improves earnings quality. Investors can model it with more confidence.”

In stating this, he stressed that infrastructure does not automatically lead to IPOs. Listings still depend on structure, compliance and access to capital.

However, state-led programmes strengthened the investment case by improving predictability, which investors value more than momentum.

“The market doesn’t reward the loudest story. It rewards clean earnings, clear cash flow and well-governed execution,” he said.

This focus underpins readiness discussions with aspiring issuers, where the core question remains whether a company can demonstrate predictable earnings supported by proper structure, compliance and disciplined capital planning.

“At the same time, investors were discriminating. Not every IPO traded strongly. Some opened flat or even drifted below the issue price, which shows the market was still pricing quality and earnings credibility,” he said.

In that sense, market conditions opened the door, but readiness determined which companies could walk through it.

The most effective IPO work, he added, is done before the market window appears, through clean corporate structures, robust compliance and rational financing plans.

Why Sarawak IPO numbers has remain limited

At the national level, Bursa Malaysia recorded 60 IPOs in 2025, raising a total of RM5.96 billion despite challenging global market conditions notably the US reciprocal tariff that hit the markets hard.

To put it into perspective, Sarawak-based listings accounted for only about five per cent of total IPOs in 2025.

Asked why Sarawak does not command a larger share of the IPO pipeline, Chua said Sarawak companies were not short of entrepreneurship; but rather constraints in IPO conversion capacity and ecosystem friction.

He noted that many Sarawak businesses traditionally relied on project financing, bank facilities and private networks.

Equity fundraising, by contrast, requires a different discipline. It includes disclosure standards, quarterly reporting and sustained investor engagement.

This shift is not automatic. Even the state government has acknowledged that execution needs access to financing plus capacity-building and capital market exposure.

The “quiet killer,” he said, is governance and chief financial officer (CFO) readiness.

CFO readiness refers to whether a company’s finance function is prepared for the demands of being a listed company. This goes beyond having someone with the CFO title.

“Public markets require institutionalisation. Internal controls, audit readiness, independent oversight, and consistent forecasting discipline.

“It’s not accidental that the Sarawak Bumiputera Economic Transformation Plan 2035 (SBB2035) related reporting stresses the need for a comprehensive approach involving access to financing, strong governance, capacity building, and exposure to capital markets,” he said.

As a result, Vision Group encourages founders and family offices to engage early with free consultation clinics and structured readiness programmes to identify potential IPO hurdles before committing significant resources.

“A confidential clinic session can quickly identify whether your “IPO blockers” are structural, compliance-related, or capital-related, before you burn time and money,” he added.

Wee echoed similar views, saying that while several Sarawakian companies have successfully listed, IPO activity in the state has historically been limited by access to broader investor networks and the resource-intensive nature of compliance and reporting.

However, greater assurance in Sarawak’s long-term development plans is encouraging more local companies to view IPOs as a strategic growth opportunity.

“Today, with increased market awareness and stronger support from advisers and sponsors are gradually lowering these barriers,” he added.

Transitioning into a listed company requires adjustments. Reporting obligations also increase, with regular disclosures and continuous investor communication.

“While challenging, these challenges are essential for building investor confidence and long-term sustainability,” he said.

For Seah, the main challenge is to meet the existing and constantly evolving governance and compliance requirements.

“During the transition process, companies must establish proper internal controls, avoid conflicts of interest, document related-party transactions, secure necessary licences and approvals, and clearly define board and management responsibilities before they can transition to listed status,” he said.

From an investor perspective, Chua said Sarawak-based issuers can still face a perception or valuation discount, though it is not a simple Sarawak versus Kuala Lumpur comparison. The discount is typically driven by uncertainty in three areas.

First is liquidity and research coverage, where smaller market capitalisation, thinner analyst coverage and lower institutional participation tend to result in lower valuation multiples.

Second is customer concentration, particularly where revenue is heavily dependent on state-linked projects, which investors see as risk.

Third is governance and repeatability, with investors favouring companies that can scale beyond founder-driven models and operate through established systems.

To narrow this gap, Chua said groundwork must be focused during IPO planning.

This includes structuring the business to diversify customers and ring-fence recurring revenue where possible, maintaining consistent disclosure quality and board discipline, and demonstrating capital efficiency with credible returns on IPO proceeds.

“The market’s reaction to 2025 Sarawak listings shows investors will pay attention when the “investability” is there, especially when demand is validated through strong subscription and aftermarket behaviour.

“What narrows the gap is repetition of good outcomes: consistent delivery post-listing, clean governance, and a visible pathway to expand beyond Sarawak.

“When a Sarawak issuer can show recurring revenue characteristics and investor appetite is validated in the aftermarket, rerating happens quickly, as seen in the strong debut dynamics for Insights Analytics,” he said.

Reality check for the IPO pathway

A week after Sarawak’s second listing last year, the International Trade, Industry and Investment Minister Datuk Amar Awang Tengah Ali Hasan outlined a target to list three Sarawakian Bumiputera companies on the exchange by 2030.

The goal is anchored on the “3-7-20” framework: elevate 20 per cent of micro enterprises to private limited company status by 2030, develop seven ‘champion’ companies in strategic sectors under the Post Covid-19 Development Strategy 2030 (PCDS 2030), then have three of them take the IPO route by 2030.

Awang Tengah stressed that the goal is not merely about prestige, but a “symbol of market confidence” in Bumiputera companies’ capabilities.

Chua however cautioned that achieving these targets will depend on disciplined execution rather than one-off efforts. He stressed that the target will only become credible when it is supported by a sustained pipeline and operating structure.

While the 3-7-20 framework already recognises the importance of financial and capacity readiness, delivering outcomes will require a practical “IPO production line” built on three core layers.

The first involves financial measures that prioritise readiness over listing costs alone. A recurring gap, according to Chua, is underinvestment in pre-IPO foundations such as finance teams, reporting systems, internal audit functions and independent board capability.

“The key is to make readiness funding accessible early, 18 to 24 months before listing so the company is genuinely investable when it hits the market,” he said.

The second layer relates to institutional measures aimed at deepening the pipeline and reducing friction. Programmes such as Road to IPO, which involved 64 Sarawak Bumiputera companies, help normalise readiness discipline.

The next step, Chua said, is to formalise these into structured cohorts with clear progression gates, including restructuring milestones, audit preparedness, governance scorecards and investor readiness.

The third layer focuses on governance, with special focus on the finance function.

“Putting it rather bluntly, many IPOs don’t fail solely because the business is weak. They fail because the company cannot produce public-market quality information consistently,” he said.

As such, CFO readiness becomes the decisive factor.

“That’s also why we encourage Sarawak businesses and family offices to make use of free, confidential consultation clinics as a first step. You can quickly benchmark your IPO readiness across structure, compliance, and capital strategy without committing to a costly process prematurely.

“Done properly, it lifts the whole ecosystem, not just one company,” he stressed.

Seah echoed this view, saying Sarawak would benefit from a structured mentoring programme, which would allow existing listed companies to share practical experience and guide non-listed company owners aspiring to go public.

“Sarawak state agency or investment corporation can also act as pre-IPO investor to provide the necessary funding to assist those selected companies to elevate their financial performance to higher and greater level during the grooming process,” he said.

Ultimately, Sarawak’s opportunity is not just to “hit three listings”, but to build three high-quality reference cases that crowd-in investor confidence and make the fourth, fifth,and sixth listings easier.

Insights Analytics Bhd

Insights Analytics provides intelligent asset management and water technology solutions, primarily serving Sarawak’s water agencies. The group began as a water technology solutions provider before evolving into a broader intelligent asset management group serving multiple industries nationwide.

On Jan 21, the company’s share price stands at RM1.81, nearly five times its IPO price of 36 sen. It closed its listing day at 65.5 sen, an 82 per cent premium, and has since trended upward.

On Jan 10, its market capitalisation surpassed RM1 billion, following news of a RM58.4 million subcontract for works on the proposed Betong–Pusa Regional Water Supply Grid.

Wee said the post-IPO performance reflects early earnings delivery, a growing order book and investor confidence in Sarawak’s development priorities under PCDS 2030 and the Sarawak Digital Economy Blueprint 2030.

“These frameworks prioritise digital transformation and utility infrastructure – areas where scalable digital and analytics solutions are increasingly essential,” he said.

Wee added that this is supported by three main drivers: earnings visibility demonstrated through strong post-listing results, a predictable growth pipeline with material contract wins, and investor recognition of Sarawak’s long-term development priorities in water and utilities.

“Our expansion into digital twin and analytics solutions positions us to deliver on these state-led programmes, offering scalable, high-value capabilities that align with

investor confidence in the state’s development trajectory,” he said.

Furthermore, Wee sees the current valuation as supported by tangible business fundamentals rather than short-term sentiment.

“Investors should focus on execution of profitable projects, expansion of digital solutions, and growth in the water and utilities sector.

“Long-term public infrastructure programmes such as Sarawak’s Water Supply Master Plan which includes the RM1.1 billion state-wide water pipeline replacement and upgrades to ensure 100 per cent water coverage by 2030, provide continuity and predictable demand, underpinning confidence in sustainable value creation,” he added.

Reach Ten Holdings Bhd

Reach Ten Holdings Bhd marked a milestone for Sarawak’s capital market by becoming the first Sarawakian company in 15 years to list on Bursa Malaysia’s Main Market.

The company owns and operates fibre-optic communication network infrastructure across Kuching and Samarahan.

As at Oct 31, 2025, Reach Ten had installed 351.5 kilometres of fibre-optic duct infrastructure and laid 887 kilometres of fibre-optic cable across the two divisions. This represents an expansion of 134.5 kilometres of ducting and 238.0 kilometres of cable since March.

On its first day of listing, Reach Ten’s shares opened at 52 sen, unchanged from its IPO price; and later closed at 54 sen, giving it a 3.85 per cent premium over its IPO price.

As of Jan 21, the shares closed at 0.46 sen, giving it into a market capitalisation RM460 million. This represents a 14.81 per cent decline from its first-day closing market capitalisation of RM540 million.

In a research report dated Dec 1, RHB Investment Bank Bhd (RHBIB) said Reach Ten is a key proxy to Sarawak’s digitalisation roadmap, citing its track record in deploying satellite broadband wireless access under Jendela Phase 1.

“The group also has many state-backed digitalisation projects including the Saluran and SMART600 initiatives,” it said.

Under Budget 2026, the federal government announced that Jendela Phase 2 will involve the deployment of an additional 2,700 sites nationwide to further improve broadband coverage.

RHBIB expects East Malaysia to capture a major share of these allocations, as broadband penetration in Sabah and Sarawak continues to lag Peninsular Malaysia.

Hartanah Kenyalang Bhd

Construction services firm Hartanah Kenyalang Bhd is principally involved in building construction, with a focus on institutional projects such as schools and other public buildings, as well as non-residential developments. The group also undertakes infrastructure construction, particularly bridges and roads.

Since its listing in early June 2025 at an IPO price of 16 sen per share, the company’s share price has traded within a narrow range of between 14 sen and 16.5 sen, reflecting modest volatility.

As at Jan 21, the share price stood at 16.5 sen, valuing the company at about RM102 million. This compares with a market capitalisation of about RM89.9 million at the first-day close, reflecting an increase of 13.79 per cent since listing.

However, Seah noted that Hartanah Kenyalang’s share price has remained largely sideways at around 16 sen over the past seven months.

“It is partly due to the slightly weaker financial performance reported by Hartanah Kenyalang in the past three quarterly results after the listing date. Nonetheless, we remain optimistic about our company future performance given the Sarawak State upward development trajectory,” he said.

Seah said state development spending to improve connectivity through the construction of new highways, state roads and rural roads is expected to be a key driver of the group’s business going forward.

In addition, he said the company is taking steps to expand and diversify into renewable energy and water supply infrastructure, in line with Sarawak’s push into green energy and its emphasis on strengthening water supply networks.

What’s next on the pipeline for Corporate Sarawak?

Chua said Sarawak’s outlook over the next three years remains positive as the state transitions from planning into delivery under PCDS 2030.

Early results from past strategic investments are beginning to surface, while the 13th Malaysia Plan for 2026–2030 provides a stronger national policy runway. Sarawak, he noted, remains anchored to its target of achieving RM282 billion in gross domestic product by 2030.

Drawing from Vision Group’s decade-long presence in Sarawak, Chua said there has been a clear rise in demand for consultancy services from local businesses and family offices.

At the same time, investor interest in Sarawak has become more focused, driven by the state’s structural advantages and its role in supporting growth not only in Malaysia, but across the wider Southeast Asia region.

“This means that Sarawak is no longer just a secondary participant in our Malaysian capital markets. It is becoming a primary engine of its growth in the coming decade,” he said.

Looking ahead over the next three to five years, Chua identified three sectors with the clearest listing readiness trajectory.

The first is digital connectivity and enabling infrastructure. Programmes such as Saluran and SMART600 continue to generate sustained demand for towers, fibre networks, managed services and backhaul, as Sarawak’s rural connectivity agenda translates into concrete projects and partnerships.

The second is utilities digitisation and industrial technology. Sarawak’s digital transformation drive is aligned with IoT- and data-led productivity, public service modernisation, water asset intelligence, smart pipeline monitoring and operations technology.

“This is where Sarawak’s push intersects with national transformation agendas and the state’s own roadmap,” he said.

The third is construction and infrastructure services with institutional demand. Chua said the most IPO-ready players are not generic contractors, but firms with repeatable execution in bridges, roads and institutional builds, supported by systems and equipment that allow them to scale into larger project packages.

Contractors tied to the energy transition supply chain, particularly those involved in grid upgrades and renewable build-outs, also stand to benefit from the IPO tailwind.

Echoing this view, Wee said he expects more Sarawak-based companies to consider public listings as investor confidence improves.

The predictability of Sarawak’s development initiatives, he said, provides companies with greater assurance that the market environment is stable and conducive to long-term growth.

He added that successful early listings are already demonstrating the tangible benefits of going public, encouraging other local firms to view the IPO route as a strategic step in their development.

Meanwhile, Seah revealed that several Sarawak-based companies across different industries are already in the pipeline for Bursa Malaysia listings in 2026 and 2027.