Other US-listed Malaysian companies have appeared on investors’ radar screens, buoyed by the successful exits of equity crowdfunding (ECF) investors. They include software company Sagtec Global and agriculture technology (agritech) firm Agroz Inc, which raised funds on licensed ECF platforms Ata Plus and pitchIN respectively.
CCH Holdings, the operator of speciality hotpot restaurant chains such as Chicken Claypot House and Zi Wei Yuan, emerged on investors’ radar screens when its share price surged to more than US$15 ($19.4) from its initial public offering (IPO) price of US$4, before crashing over 80% in a single day.
Two industry players Wealth spoke to say there are about 17 local companies listed on the US market.
As investors increasingly cast their sights on foreign markets, should they also look at these home-grown companies listed in the US? A glance at the performance of these companies reveals that many of their share prices are underperforming and have fallen below their IPO prices as at June 11.
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Ng Zhu Hann, founder and CEO of boutique asset management firm Tradeview Capital, says investors who intend to broaden their investment horizons to include US-listed local companies should keep an eye on whether they have a strong business presence beyond home shores, like Grab.
He notes that Grab’s listing on the US market makes sense as it was backed by global and prominent institutional investors and venture capitalists, such as SoftBank Group and Altimeter Capital. The company is also widely known to investors globally as having a very strong presence in Southeast Asia, prompting investors to research, invest in or trade the company’s shares, which translates into liquidity and price discovery.
Branding is a key reason for local companies to list in the US as the Nasdaq is a globally known name. Another is valuation, as they can raise more funds by listing in the US than locally. The amount raised can also be substantially higher in ringgit terms after currency conversion.
However, Zhu Hann points out that a higher valuation at IPO may be beneficial to shareholders and the company in the short term, but could come at the expense of long-term sustainability. “It can immediately raise a higher amount of funds. But if there isn’t earnings momentum to sustain a gradual increase in the share price moving forward, the company won’t be able to raise more funds as it doesn’t instil confidence in investors,” he adds.
“This means the benefit you get from a higher valuation during the IPO was one-off. It is not something we, as fund managers, look favourably upon in listed companies. We like those whose share prices grow sustainably over the long term, in line with earnings growth. And if they want to raise funds from us subsequently, we are happy to participate.”
Zhu Hann says there have been cases where a company’s share price collapses shortly after the IPO, which some may perceive as manipulation. “In general, a very simple way of assessing whether a company’s share price is being perceived as being manipulated is by looking at the time frame. If there’s a sudden increase and drop within a short span of time, people are likely to perceive it as such,” he adds.
“It is possible that when a company can’t find investors who believe in its business prospects, the IPO advisers could be involved in propping up the share price to keep things rosy on the first trading day. After all, they are paid for the listing. It’s their job to make sure the IPO is a success.”
US-listed local companies could face financing challenges too, such as being cut off from small and medium enterprise (SME) loans. Meanwhile, growth-stage companies are not as established as big corporations to qualify for bank loans at favourable rates, says Zhu Hann.
A listing pathway for growth-stage companies without profit track record
Software and technology firm Sagtec Global made local news when Ata Plus announced that some of its ECF investors had made a return of 10 to 15 times on their initial investment after the company was listed on the Nasdaq in March last year. It was also involved in a deal to acquire a 40% stake in Rider Gate, a wholly-owned subsidiary of people solutions and technology licensing provider Ramssol Group. The deal was aborted in August last year.
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In an interview with Wealth, Sagtec Global CEO Kevin Ng says the company’s decision to list in the US was for branding and profile purposes to prepare the firm for overseas expansion.
“Before we went public, we tried expanding to Indonesia and Thailand with their software dealers. But they weren’t interested in meeting us as we were a small outfit. I’m not saying that Bursa is not well known, but the Nasdaq is a bigger brand that can help us go global more easily,” he adds.
Another reason is valuation. Kevin says a local advisory firm told him to come back later when he approached it for a public listing at a time when Sagtec was growing but still unprofitable. So, he engaged the firm in 2022 when the company was generating profit of about RM2.8 million. However, the number was not good enough to raise the amount of funds he intended, when measured by its price-earnings ratio (PER), without giving up too much control of the company.
“For instance, if we are earning RM3 million ($940,000) and looking to raise funds with a valuation of RM90 million, it would be a PER of 30 times. But they think it’s too high. And if we raise funds at a lower multiple, we will dilute our stake too much,” says Kevin.
As at June 11, Sagtec was trading at US$1.09 per share, compared with its IPO price of US$4. Despite this, the company achieved record revenue of US$19.1 million in its financial year ended Dec 31, 2025 (FY2025), marking a year-on-year growth of 49%. Net profit grew marginally to US$1.8 million, according to its latest filing.
The increase in revenue was mainly driven by a higher distribution of food-ordering kiosks and the use of power bank charging stations. Its core businesses also include the provision of a cloud-based point-of-sale and ordering platform as well as data management and analysis services.
The company’s Form 20-F annual report filing for FY2025 shows that it derived 60% to 70% of its total revenue for FY2023 to FY2025 from its top three customers — all based in Malaysia.
For indoor vertical farming firm Agroz, its listing was part of a deal to secure investment in 2023 from Gavin Lim, who is now its director and second-largest shareholder. According to LinkedIn, Gavin was CEO of HWGC Holdings and co-founder of HWGG Capital in Labuan.
“Gavin took a keen interest in Agroz as he likes agritech and its future potential. He promised to come in as a strategic investor only if I agreed to get the company listed,” says Agroz CEO Gerald Lim.
However, Agroz was barely 3½ years old. It was unprofitable, but still growing, despite specialising in a niche segment with investor interest. The company would have had a much higher chance of getting listed on the local bourse with a profit track record. That was why Gerald started actively engaging the Nasdaq and successfully listed the company on Oct 1, 2025.
Gerald says the US market has always allowed unprofitable, growth-stage companies to be listed. They are not necessarily priced based on profit track record, but on other metrics such as future earnings or enterprise value. And branding, again, is another reason the company took the US listing route.
According to its FY2024 annual report, Agroz generated revenue of RM40.9 million, with 51% coming from farm solutions and the remainder from the sale of fresh produce. It made a net profit of RM3.5 million, translating into a net margin of 8.6%.
At the time of writing, the company had already been exporting its fresh produce to the Singapore market. Gerald says the company is looking to expand its business into Indonesia and has received some business interest from the Middle East and Turkey.
Nasdaq sets a higher bar for IPO
Sagtec’s Kevin acknowledges that some members of the local investment community may perceive a Nasdaq listing as an “easy way out” for local companies to raise funds, partly because it does not require a company to have a certain level of profitability. But he begs to differ.
He says companies need to go through an audit process that adheres to international standards. Other challenges, echoed by Gerald, are the ongoing fees, including the listing fee, that are paid in US dollars — all while the companies derive most of their revenue in the ringgit.
There is also the difference in time zones, which can be taxing on a company’s management team as they are required to participate in investor briefings and awareness programmes at midnight local time.
Most importantly, Kevin says the Nasdaq has raised the bar for companies to list on the exchange since last year by raising the minimum fundraising amount for an IPO.
According to the Nasdaq’s official website, the exchange revised its standards in September last year, including “a US$15 million minimum market value of public float, applicable to new listings on the Nasdaq under the net income standard”.
In December, the exchange also modified its Listing Rules 5405 and 5505 so that the “minimum market value for unrestricted publicly held shares (MVUPHS) for new listings under the net income standard on the Nasdaq Global Market and Nasdaq Capital Market is US$15 million”.
Put simply, it means that a company previously only needed US$5 million worth of shares in public hands to qualify for listing under the net income standard, and it could partly meet that threshold using shares from existing shareholders who simply wanted to make their stakes tradeable. But from Jan 16 onwards, the minimum has been tripled to US$15 million, and every dollar of it must come from fresh money raised from new investors in the IPO itself, not from existing shareholders.
“Just a year ago, the minimum [amount required to be raised through an IPO] was US$5 million, and we did US$7 million. Now, it is US$15 million. It is a big challenge. Not a lot of Malaysian companies can raise that amount,” says Kevin.
Keep an eye on dual listing with the Nasdaq, SGX
Alan Inn, country head of CGS International Malaysia, says investors looking to invest in US-listed local companies should stay diversified, scrutinise financial statements themselves or hire a professional and be sceptical of companies making extraordinary claims without clear evidence.
Inn says the absolute listing cost of Bursa Malaysia is generally cheaper than the Nasdaq’s, but it is easier for companies to succeed with a Nasdaq listing because of its vastly superior liquidity, global investor access and capital-raising ability.
“For a Malaysian company, Bursa is the natural step. It is easier to access Malaysia-based investors for a Malaysia-centric company, and in some cases, Asean-centric company, due to familiarity. Having said that, efforts may be made to make it more accessible for technology companies to list on Bursa.”
He adds that Malaysian investors generally remain tethered to traditional benchmarks, with profitability acting as the primary filter for confidence.
“Technology companies often prioritise aggressive scaling, but the local appetite for ‘growth-at-all-costs’ models hasn’t quite matured. Many Malaysian investors prefer to wait for a proven profit track record before buying into a company.”
Inn says investors should look out for the upcoming launch of the landmark “dual-listing bridge” by the Nasdaq and Singapore Exchange in the middle of the year, which will create a Global Listing Board.
“This partnership will enable companies, particularly high-growth Asian firms with a minimum of US$2 billion ($2.6 billion) market cap, to simultaneously list on both exchanges using a single set of documents to streamline capital raising,” he explains.
What does a reverse stock split imply?
A reverse stock split is a corporate action in which a company consolidates its existing shares into fewer shares at a fixed ratio. For instance, a one-for-10 split means every 10 shares a shareholder owns become one, while the price per share rises tenfold.
Such corporate action is not uncommon among US-listed Malaysian companies as their share prices may fall below US$1 ($1.3), which is the minimum bid price generally required by the Nasdaq for companies to maintain their listing status post-initial public offering (IPO). The minimum IPO price on the Nasdaq is US$4.
“If a company’s share price falls below this, it risks delisting. A reverse stock split consolidates shares and raises the per-share price to comply with these rules,” says Alan Inn, country head of CGS International Malaysia.
However, a company may have other reasons for initiating a reverse stock split, he adds. For instance, to improve marketability and perception.
“A stock trading at 50 US cents per share may seem cheap or risky to investors, even if a company has solid fundamentals. By consolidating into fewer shares at a higher price, it can improve such perception,” he says.
Institutional investors often have a minimum price requirement in their investment policies. A higher share price can help a company gain access to a larger pool of investors.
A company can also conduct such an exercise to reduce trading costs and spreads, as lower-priced stocks often have wider bid-ask spreads — the difference between the buy and sell price — making trading more expensive. A higher nominal share price can narrow these spreads and reduce transaction costs for traders, says Inn.
Sometimes, it is conducted for strategic reasons, preceding a merger or acquisition by the company. It can also be used before a major business restructuring or pivot.
“A reverse stock split doesn’t change the company’s fundamentals or actual value. If the company does a one-for-10 reverse split, your 1,000 shares become 100 shares, but your ownership percentage and total value remain the same, minus any rounding effects. It alone doesn’t make a struggling company fundamentally healthier. It’s purely a mechanical adjustment,” he says.
This story first appeared in the June 22 issue of The Edge Malaysia.
