Unlocking value for publicly listed companies

THERE has been much news on the number of companies delisting from the Singapore Exchange (SGX) recently. This is unsurprising, given the resources that a publicly listed company (listco) needs to maintain its status.

On the other hand, the potential benefits of public listing – including access to additional sources of capital – continue to capture interest. Coupled with the S$30 million Value Unlock Programme that SGX launched in November 2025, companies may be keen on reviewing their investability plans.

However, while these are welcome interventions, programmes and grants cannot substitute for the fundamental work that boards themselves must do.

Value creation and valuation gaps

Value is best understood as the intrinsic worth of a company based on its ability to generate future cash flows. Value creation is hence the process of inventing something that influences the intrinsic worth of a business’ assets to generate cash flow.

Importantly, value creation should benefit all stakeholders. It is therefore important for companies, particularly listcos, to understand how to create and sustain value.

For listcos, a valuation gap arises when share prices are not reflective of their economic value.

Such a disconnect is often caused by information asymmetry. The valuation gap is therefore a communication problem as much as it is a financial one.

To address a valuation gap, boards must understand that their investors value companies through the following lens:

• Economic: Investors favour firms that signal quality through credible leadership, robust capabilities, strong governance and consistent performance.
• Social: Investors value legitimacy arising from reputable partners, intermediaries and regulators.
• Cognitive: Investors favour companies that are easy to understand.

When listcos account for these valuation dimensions, they narrow the valuation gap and reap substantial benefits. SGX’s Value Unlock Programme is, hence, timely.

A fair valuation allows for refreshing shareholder base and reduces the cost of capital. Both can fuel the company’s growth and grant greater expansionary flexibility.

Benefits may also extend internally. Employee morale can improve when the company’s value proposition fosters purpose.

The importance of a strategic plan

At the heart of unlocking value lies an evidence-based strategy that details the company’s position, and encompasses innovation, differentiation and scaling. Such a strategy must be defensible in order to provide comfort to investors.

A robust strategy is propped by four pillars.

• In terms of market leadership, opportunities that can be captured due to the listco’s strengths should be identified.
• Operational efficiency zooms in on systems that allow productivity and quality.
• In leadership and management, the fit of composition and competencies is evaluated.
• Finally, financials link strategic choices to outcomes, show risks and evaluate resource allocation.

Companies with strategic clarity command stronger valuations because clarity reduces uncertainty, and markets price uncertainty harshly.

Sheng Siong Group, for instance, has a clear strategic position, which is operationalised through its focus on direct sourcing, cost discipline and a principled approach to expansion. Its clear strategy has translated into above-average returns on equity, demonstrating that even within a competitive sector, strategic clarity can be a driver of sustainable value.

Structural strength

A solid strategy alone is insufficient; companies must be structured to execute plans well.

Operational structure must support efficiency, quality, and scalability.

Capital structure must reflect discipline. Excess cash may signal a lack of innovation, while strategic capital deployment signals seriousness in value creation.

Lastly, inorganic growth must be pursued selectively.

Mergers and acquisitions can create value only when strategically justified and financially disciplined.

Board oversight

While management creates value through execution, boards ensure that the strategy serves the best interests of the company.

Such a fiduciary role is conducted through regular strategy reviews, performance evaluation, and holding executives accountable for results.

Whether a board creates value is contingent on its composition. Investors place greater trust in boards whose composition is aligned with the company’s strategy. This is because the board ultimately shapes the decisions that investors price into the company.

Governance as a value multiplier

Investors assess governance quality before committing capital. They look for effective boards, alignment of executives to long-term performance, and transparent disclosure.

The Singapore Code of Corporate Governance sets the bar. But companies with premium valuations build well above it and translate governance into competitive advantage.

In Singapore, this is particularly important, given the prevalence of founder-led and/or family-influenced listcos. When this is done well, investors notice; when it is not, they discount accordingly.

Take the example of Hyphens Pharma International, a Catalist-listed speciality pharmaceutical company, which was recognised with the Gold Award for Best Managed Board at the Singapore Corporate Awards 2024. The company takes care to build investor confidence through a clearly articulated dividend policy and a well-governed board.

Market communication and investor engagement

Ultimately, valuation can still fall flat if a company fails to tell its story well.

Investor relations is therefore a strategic capability. Companies that engage investors consistently, offering a credible narrative and reasonable guidance, tend to enjoy stronger valuations.

Micro-Mechanics, a manufacturer of high-precision consumable tools for the semiconductor industry, is exemplary. When the global semiconductor industry contracted sharply from 2022, its management disclosed segment-level declines and communicated a plan to restore profitability.

The company’s commitment to substantive shareholder communication earned it illustrious awards and helped it retain its top 30 position in the Singapore Governance and Transparency Index for the 10th consecutive year in 2025.

Taken together, strategy and structure create value and governance sustains and multiplies it.

Yet for listcos, creating value – which drives growth – is only part of the task. That value must also be recognised by the market. Transparent engagement with investors enables companies to achieve this.

The writers are partners at JP Wilson, a growth strategy advisory for South-east Asian growth enterprises