In a note today, the research firm said the group’s stockbroking business is a major contributor of revenue, accounting for 69.73% of total revenue for FY2022.

Meanwhile, its advisory services under the corporate finance segment made up 30.27% of total revenue for that year.

For FY2023, TA Securities has projected that the group’s earnings will drop 30.4% year-on-year (y-o-y) due to lower placement fees and lower utilisation of margin financing facility services by clients year-to-date (YTD).

“Furthermore, the stockbroking segment is impacted by decreasing brokerage fees along with declining average daily trading activities due to lower trading activities from retail and institutional investors.

“We also forecast softer contributions from the corporate finance segment due to a decrease in advisory fees and the company securing fewer new mandates YTD compared to 2022.

TA Securities anticipates that the group’s earnings will recover in FY2024 and FY2025 due to increased market and corporate activities.

“We foresee a slight earnings recovery of 3.1% for FY2024 to RM12.7 million and 3.8% for FY2025 to RM13.2 million on the back of a pickup in market and corporate activities,” it said.

Mercury Securities is principally involved in the provision of stockbroking, corporate finance advisory services and related businesses.

It is set to be the first stockbroker to go public in 20 years on Sept 19, the scheduled initial public offering (IPO) date.

The group aims to raise RM39.27 million from its IPO, which entails the issuance of 157.09 million shares at 25 sen apiece.

Its post-listing market capitalisation is expected to be at RM223.25 million, based on an expanded share capital of 893 million shares, at 25 sen per share.

Public Investment Bank Bhd is the principal adviser, sponsor, sole underwriter, and sole placement agent for this IPO exercise.