Media production company GHY Culture & Media plans to raise $107.5 million in its initial public offering, in conjunction with its listing on the Mainboard of the Singapore Exchange (SGX).
This makes the company the third non-REIT Mainboard listing on the SGX this year.
GHY is offering an aggregate of 18.7 million shares to institutional investors and three million shares for retail shareholders, and an additional 141.2 million new shares to cornerstone investors including Ron Sim, better known as founder of the Osim lifestyle group.
Based on the offering price of 66 cents per share, the post-offering market capitalisation of GHY will be approximately $708.7 million, says the company in a press release on Dec 11.
GHY intends to recommend dividends of at least 30% of the Group’s net profit after tax generated in FY2020 and FY2021, excluding the interim dividends of $10 million declared by the Board in FY2020.
The public offer will open at 9am on Dec 11 and close at 12pm on Dec 16. Trading of its shares is expected to begin on Dec 18.
See: GHY Culture & Media sets its sights on 'Nanyang'
GHY is an entertainment business that focuses on the production and promotion of dramas, films and concerts in the Asia-Pacific region. The Group has produced several well-received dramas and films in the PRC, Singapore and Malaysia, most recently a remake of Mediacorp’s hit television series ‘The Little Nyonya’.
The Group has also undertaken the production of concerts for well-known international artistes in Singapore, with upcoming concerts to be held in Singapore, Malaysia and Australia. The Group also provides talent management services and costumes, props and makeup services in the PRC and Singapore.
Besides Sim, the other cornerstone investors are Epical Entertainment, Hong Kong Chixin Investment Co, ICH Capital, iQIYI International Singapore, King Kong Media Production, Qilin Asset Management, Songful Global Investment, V3 Brands, which is headed by Sim. and Yinson Capital.
DBS Bank and UOB Kay Hian are the joint issue managers and global coordinators for the offering. DBS Bank, UOB Kay Hian, and Bank of China, are the joint underwriters and bookrunners for the offering.
GHY intends to channel its net proceeds to a few avenues. It intends to use approximately $64.5 million for the expansion of the Group’s TV program and film production business via investment in production, acquisitions, joint ventures and/or strategic alliances; approximately $21.5 million for the expansion of the Group’s concert production business via investment in production, acquisitions, joint ventures and/or strategic alliances; and approximately $15.0 million for general corporate and working capital purposes.
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For FY2019 ended December, it generated revenue of $66 million, a surge from $3.4 million in the preceding year, as the company collected revenue from the sales of its productions.
FY2019 earnings came in at $12.4 million, compared to losses of $1.5 million. For 1HFY2020, the company generated revenue of $37.2 million, and recorded earnings of $13 million.
For 1HFY2020, television programme and film production accounted for 58.9% of revenue, compared to a full 100% of revenue in the preceding period. This was because the company had diversified into the concert promotion business, which accounted for 39.8% of revenue in the half-year.
Speaking to The Edge Singapore in an interview this week, executive chairman and group CEO Guo Jingyu says he had briefly considered listing in Hong Kong, but settled on Singapore for a number of reasons, including market regulation here and untapped potential in the Southeast Asian media production industry.
GHY currently has a headcount of some 125 employees, along with close to 50 artistes. “In terms of production, we are a new team but with old teammates,” says Guo. “We’ve been in the industry for more than 20 years. We’re very strong in what we do.”