IPO glossary

Bursa Malaysia's board for growth companies, with lighter listing requirements and a sponsor to guide them. Most Malaysian IPOs list here.

The shares you actually receive after the ballot. If you are not successful, your money is refunded.

Checking the model on past IPOs using only the information available before each one listed, to see how often it was right.

When more shares are applied for than are available, the issuing house draws a ballot to decide which applications receive shares.

Applications are grouped by size into tiers, and each tier has its own chance of success in the ballot.

Shares set aside for Bumiputera investors, including a separate public ballot and placements approved by the Ministry of Investment, Trade and Industry (MITI).

Malaysia's stock exchange, where listed shares are bought and sold.

Money spent on long-term assets such as machines, buildings and equipment.

Your account with Bursa Depository that holds your shares. You need one, through a stockbroker, to apply for an IPO.

An institution that agrees before the IPO to buy a fixed block of shares, often a sign of professional interest.

Current assets divided by current liabilities. Above 1 suggests the company can cover the bills due within a year.

How past IPOs handled by the same principal adviser opened on their first day.

Every past IPO grouped by how oversubscribed it was, with the typical first-day open for each group.

How often the model correctly called whether an IPO would open higher or not. Compare it with always guessing up, which is right 68% of the time.

Cash a company pays out to shareholders from its profit. Many prospectuses state a dividend policy.

An early version of the prospectus published for public viewing before the offer is approved. Figures and dates can still change.

Example: A company shows as Draft prospectus in the screener until its final prospectus is registered.

Earnings before interest, tax, depreciation and amortisation: a rough measure of cash earnings from operations.

The total number of shares after the IPO, counting the new shares.

Example: Market value at listing is the offer price times the enlarged share capital.

The company's profit after tax divided by the number of shares.

An estimate of what the share could be worth if it were valued like its listed peers. A rough guide, not a target price.

The index of the 30 largest companies on Bursa Malaysia, used as a quick read of how the overall market is moving.

The last day of a company's accounting year. FPE (financial period ended) marks a shorter period, such as six months.

CISCOM's statistical estimate of where an IPO is likely to open on listing day, based on how similar past IPOs opened. An educational estimate, and it can be wrong.

The price of the first trade on listing day, compared with the offer price.

Example: Offer price RM0.25, first trade RM0.30: a +20% first-day open.

Where a company operates, counted by outlets, branches or sites in each state, from its prospectus.

Where the middle half of similar past IPOs opened. In back-testing the first day landed inside this range about half of the time.

Operating cash flow minus capex: the cash left over that could repay debt or pay dividends.

Borrowings divided by shareholders' equity. Higher gearing means more of the business is funded by debt.

Gross profit as a percentage of revenue.

Example: Revenue of RM100m and gross profit of RM30m is a 30% gross margin.

The total money raised from the IPO before listing expenses.

Revenue minus the direct cost of making or delivering what was sold.

A forecast where the model gives at least a 95% chance of opening above the offer price.

A report in the prospectus by an outside research firm on the size and outlook of the company's industry.

A professional investor such as a fund manager, insurer or pension fund. Most IPO shares go to institutions through private placement.

When a private company sells shares to the public for the first time and its shares start trading on Bursa Malaysia.

The company that receives IPO applications, runs the ballot and announces the results, such as Tricor Investor & Issuing House Services.

A board for sophisticated investors only. The public cannot apply, so CISCOM leaves it out.

The day the shares start trading on Bursa Malaysia. The first-day open is set on this day.

The standard trading unit on Bursa Malaysia: 1 lot is 100 shares.

Example: Applying for 2,000 shares is applying for 20 lots.

Bursa Malaysia's board for larger, established companies with a longer profit record.

What the whole company is worth at a share price: the price times the total number of shares.

The share of this year's IPOs that opened above their offer price.

The middle result of the similar past IPOs: half opened better, half worse.

A period after listing when promoters cannot sell their shares, set out in the prospectus.

The past listing that looks most like this one on market, sector, pricing and demand, and how it opened.

What the company owns minus what it owes, divided by the number of shares.

Profit after tax as a percentage of revenue.

How many recent news articles about IPOs read as positive or negative.

Existing shares sold by current owners. The money goes to those owners, not the company.

Example: If 40% of an IPO is offer for sale, that part is owners cashing out.

The days when the public can apply for IPO shares, from the opening date to the closing date.

Example: An offer period of 24 Sep to 5 Oct means applications close on 5 Oct.

The price per share you pay when you apply for the IPO.

Example: An offer price of RM0.25 for 2,000 shares costs RM500.

The cash the business actually brought in from its day-to-day operations. It can differ a lot from profit.

Profit from the main business after running costs, before interest and tax.

Work already won but not yet billed, common for construction and engineering firms. It hints at future revenue.

How many times more shares the public applied for than were available.

Example: Oversubscribed 50 times means applications asked for 50 times the shares on offer.

The share price divided by net assets per share. Above 1 means paying more than the book value of the assets.

The share price divided by the profit per share. It tells you how many years of current profit you are paying for.

Example: A P/E of 15 means paying RM15 for every RM1 of yearly profit per share.

What is left after every cost, interest and tax. The bottom line.

Profit after all costs and interest, before tax is paid.

A listed company in the same line of business, used to compare valuations and margins.

Shares reserved for the company's eligible directors, employees and business partners.

A firm that finds institutional and selected investors for the private placement.

The investment bank that manages the IPO. On the ACE Market it also acts as the company's sponsor.

Shares sold directly to selected institutional and other investors, outside the public ballot.

Figures restated to show what the accounts would look like as if the IPO and its changes had already happened.

The founders or major owners who control the company before and after the IPO.

The official document for an IPO: the business, its finances, risks, how many shares are offered and at what price, and how the money will be used.

New shares created for the IPO. The money raised goes to the company.

The shares the public can apply for through the ballot. It is often a small slice of the whole IPO.

On average, how many days customers take to pay the company.

The final prospectus that the offer is made on. Once it is registered, the offer price and dates are set.

An individual investing their own money, as opposed to a fund or institution.

The money a company earns from selling its products or services, before any costs.

The section of the prospectus where the company lists what could go wrong for the business.

The business area a company is grouped under on Bursa Malaysia, such as Technology or Construction.

Malaysia's capital market regulator. It oversees IPOs and protects investors.

A share that the Securities Commission's Shariah Advisory Council lists as meeting Islamic investment rules.

Strengths, weaknesses, opportunities and threats: a quick structured summary of a business.

Possible concerns our AI noticed while reading the prospectus, sorted by how serious they are.

The middle IPO in a group. Unlike an average, one huge debut cannot pull it up.

Fewer shares were applied for than were available. The underwriters buy the shares left over.

A firm that agrees to buy any public shares left unsold, so the IPO can go ahead even if demand is weak.

How often similar past IPOs opened above, at or below their offer price.

How the company plans to spend the money raised, such as new factories, paying down loans or working capital.

An IPO that was called off before listing. Any application money is returned.