It’s not often when celebrities and the financial markets meet each other, but when they do, it invites more media scrutiny than usual.
Think of The Honest Company founded by Jessica Alba in 2012, and which was listed on the NASDAQ (NASDAQ: HNST) in 2021 after an IPO that raised US$412.8 million.
On 28 October 2022, NoonTalk Media Limited (“NoonTalk”), a Singapore-based media company founded by Singaporean actor, TV host and radio DJ Dasmond Koh, issued their preliminary offer document (more than 300 pages) with the intention to list the company on the Catalist board of the Singapore Exchange (SGX). If you prefer to read the shorter summary, check out the product highlight factsheet.
While the company is smaller compared to the usual IPOs that we see on the SGX mainboard, we found this initial public offering intriguing as it gives us insights into Singapore’s media landscape. Being a homegrown Singapore company, NoonTalk would also face many of the typical challenges and potential expansion opportunities that other similar media companies would face.
Here are 6 things we found out as we run through their preliminary offer document and product highlight factsheet.
#1 NoonTalk’s Business & Revenue Model
The revenue model is one of the first things potential investors should care about before they invest in a company. For NoonTalk, the company shared that they aim to be Singapore’s leading media agency in creating quality entertainment content and to inspire a vibrant media landscape in Singapore, with a particular niche in Chinese-language media productions.
The company has two main business segments that generate revenue.
The first is its Management & Event arm. This segment comprises services relating to the management of artistes and talent, management of studio venue and equipment, management of projects (including livestreaming services) and events conceptualisation and management services (both in terms of in-person events and livestreamed events).
The second is its Production arm. This segment comprises services relating to multimedia creation and production, film and television production and video production. Marquee projects it has organised include Chingay 2021 and 2022, and ChildAid 2021. It also produces films, web series and television serials.
Revenue for the company in FY2022 is as such.
#2 Revenue From Production Increased From FY2020 To FY2022
Revenue from Production has increased in recent years from $1.436 million in FY2020 to $2.593 million in FY2021 and $4.156 million in FY2022. This arises mainly from being able to secure projects such as Chingay 2021 ($1.4 million), additional revenue of $527,000 arising from securing a wider scope of work for Chingay 2022, and further revenue from drama and movie productions.
#3 Revenue From Management & Event Business Declined In 2021, But Rebounded In 2022
Unfortunately, revenue from its Management & Event business declined from $1.607 million in FY2020 to $1.238 million in FY2021. The company attributes this decline due to lower demand for artistes and fewer in-person events being organised by our customers due to more stringent restrictions being imposed on events and public gatherings in Singapore because of the COVID-19 pandemic.
However, for FY2022, the business segment saw a strong rebound as revenue increased by 78.9% to $2.215 million, higher than its pre-pandemic figures. This is due to an increase in projects as restrictions imposed on events and public gatherings in Singapore progressively eased starting at the end of FY2021 and throughout FY2022.
#4 NoonTalk Is Breaking Even
When it comes to investing in companies, investors typically fall into two camps. They are investors who may look at high-growth companies that are loss-making but are growing exponentially in their revenue and/or subscriber growth. Some investors prefer investing in companies that are already highly profitable.
NoonTalk doesn’t exactly fall into either camp.
On one hand, while growth appears decent in the last two years, this isn’t a high-growth technology company with strong user traction. Rather, it’s largely a B2B company that secures projects and delivers end-to-end value to its clients, including the provision of artistes under its management and producing shows for clients. As explained, the company is generally awarded contracts by way of tender for large-scale events and projects by clients such as the People’s Association, the National Arts Council, Marina Bay Sands and Changi Airport Group.
The company is also aware that exceptional events such as an outbreak of contagious diseases such as COVID-19 can lead to a high number of cancellations of events and projects.
Currently, the company has an order book of $1,580,000.
On paper, the company is profitable. Profits for FY2020, FY2021 and FY2022 are at S$73,979, S$189,244 and S$22,407.
However, excluding certain one-off gains such as government grants, the company’s net profit would have been lower. According to the company, if such other income is excluded from the Company’s statement of profit or loss and other comprehensive income, it would have been loss-making during the Period Under Review. Net profits after tax for FY2020, FY2021 and FY2022, will turn from S$73,979, S$189,244 and S$22,407 into net (loss)/profit after tax of (S$77,872), S$1,726 and (S$547,041).
It’s worth noting that the company does appear to be able to keep its cost of sales at a consistent proportion of its topline revenue. This is at 65%, 64% and 72% for FY2020, FY2021 and FY2022 respectively.
#5 Artistes Xu Bin & Kimberly Chia Own Shares In NoonTalk
It’s always interesting to see who owns how many shares in a listed company. For NoonTalk, there is even more attention given that some of the significant shareholders are well-known artistes.
Artistes Xu Bin & Kimberly Chia own 2.22% and 1.11% of the shares respectively in the company.
#6 NoonTalk’s Strategic Plans For The Future
NoonTalk highlighted some key strategic areas for growth. This includes extending its regional footprint and pursuing regional collaborations to bolster existing service offerings across the Asia-Pacific region including Thailand and China. The company also hopes to expand its artiste base regionally and to represent regional artistes across the Asia-Pacific region such as the Greater China region.
With the funds from the IPO, NoonTalk also hopes to drive long-term growth by pursuing strategic investments and acquisitions in production companies within the Southeast Asian region. This includes production and post-production companies that are involved in the film and television industries. NoonTalk also intends to diversify its operations by venturing into partnerships with companies in relevant industries such as MICE events, concert promoters to jointly organise concerts featuring Thai, Korean and Chinese artistes.
The post NoonTalk IPO: 6 Things To Know About NoonTalk, The Media Company Founded By Dasmond Koh, Looking To List On SGX appeared first on DollarsAndSense.sg.
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