SHARES in AllHome Corp.’s initial public offering, the biggest in the Philippines in three years, stand a good chance of gaining when they start trading Thursday, according to analysts and investors.

That’s because the home improvement and furniture retailer priced its IPO at the lower end. Also, with overseas demand exceeding the allocation limit for non-locals, foreign investors could provide support for AllHome’s share price, they said.

The lower IPO price made AllHome’s valuation “attractive” while “there’s pent-up demand from foreigners,” who didn’t get all the shares they wanted, said Noel Reyes, chief investment officer at Security Bank Corp.

AllHome is the nation’s biggest IPO since Pilipinas Shell Petroleum Corp.’s $390 million flotation in 2016. It’s the third company go to public this year in the country, while the nation awaits its biggest IPO from Metro Pacific Investments Corp.’s hospital unit. Axelum Resources Corp., a coconut products producer that sold shares before AllHome, was priced at the lower end of its range and sank 6.2% when it began trading on Oct. 7.

Allhome’s IPO raised P12.94 billion ($250 million) from the sale of 1.125 billion shares at P11.50 each — the low end of its indicative price, with the top end at P16 a share. The amount doesn’t include an additional 168.75 million shares set aside as an over-allotment option.

At its IPO price, valuation is at 28 times estimated 2020 earnings, making AllHome comparable with Wilcon Depot Inc., a retailer of hardware and home building materials, according to Rachelle Cruz, an analyst at AP Securities Inc.

“Stock could follow Wilcon’s performance, which began weak then started to climb as it delivered on store expansion and earnings,” AB Capital & Investment Corp. Chief Investment Officer Gerard Abad said. “Those buying the IPO are entering a business that’s still at the ground floor. AllHome will use the money for expansion and plug holes in its business model”

Mr. Reyes noted AllHome stores offer a more complete lineup than Wilcon, making it an alternative.

“AllHome’s expansion won’t be hampered by negotiations and lack of location since Vista Land has commercial properties in its more than 150 residential projects,” he said. Bloomberg