Post-IPO growth and profitability of Thai listed companies

The Stock Exchange of Thailand

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Privately-held firms often choose to pursue an initial public offering (IPO) with the hope that the IPO will bring an influx of cash and help grow their business.

That was what 305 Thai companies did in the past 10 years, during which time most had achieved that goal within three years of their IPO.

These companies represented various industry groups, mostly in Services and Property & Construction. According to operating results and the growth of companies that were listed on the Stock Exchange of Thailand in the past 10 years, most of the 305 companies, including 132 Market for Alternative Investment (mai)-listed ones, saw increases in revenue, operating profits and market capitalization in three years after going public.

In terms of revenue, 30 percent of such companies grew their average annual revenue by more than 20 percent and almost 80 percent of all showed annualized growth. About 80-90 percent of new members in the Financials, Technology, Services, and Agro & Food industry groups posted an average annual increase in revenue for three consecutive years after the IPO.

The Thai capital market as driving force of economic growth infographic

Regarding net profits, nearly 50 percent showed an average growth of more than 20 percent in three years after the IPO, while 65 percent reported annualized growth. The most outstanding were those in the Financials and Resources industry groups, with nearly 80 percent registering continuous growth in net profits for the three consecutive years after their IPO.

Only 25 companies from all 305 or 8 percent slipped into the red in three years after going public.

On market cap, half of the 173 companies listed on the SET and 70 percent of the 132 companies listed on mai between 2013 and 2022 enjoyed an increase in the value of their stocks.

Remarkably, some 21 mai-listed companies or 14 percent of the total mai-listed companies during 2013-2022 were qualified for the main board listing and moved to the SET following a sharp rise in their market cap. The process took less than three years for more than half of these companies which were mostly in the Resources and Services industry groups.

The front-runners are new members of the Technology and Agro & Food industry groups, as the market cap for 75 percent of them has seen healthy growth up to now. The percentage for the Financials and Services industry groups was slightly lower, at 65 percent.

The road was not paved with roses for all: of all 305 companies, seven companies or 2 percent saw the value of their companies drop by more than 25 percent from the IPO level. But what is remarkable here is the majority have achieved their business growth ambitions with public funds mobilized via the capital market.

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The Stock Exchange of Thailand

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