{"id":4739,"date":"2018-09-19T07:25:04","date_gmt":"2018-09-18T23:25:04","guid":{"rendered":"https:\/\/www.smallcapasia.com\/?p=4739"},"modified":"2018-09-18T23:01:54","modified_gmt":"2018-09-18T15:01:54","slug":"vividthree-ipo-here-are-5-key-things-you-should-know","status":"publish","type":"post","link":"https:\/\/www.smallcapasia.com\/zh-hant\/vividthree-ipo-here-are-5-key-things-you-should-know\/","title":{"rendered":"Vividthree IPO: Here are 5 Key Things You Should Know"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Vividthree Holdings can trace its history back to 2006, where they started out as a visual effects studio. Today, they are involved in creating content for the various platform by leveraging on the virtual reality (VR) technology. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In addition to that, they also provide Post-production services, mainly in visual effects, computer-generated imagery, and other post-production related work.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The company was previously owned by mm2 Asia with a 51% stake. Last month, Vividthree entered into a restructuring agreement to spin-off from its parent company and to be listed on the Catalist board. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You can find the prospectus <\/span><a href=\"http:\/\/repository.shareinvestor.com\/rpt_view.pl\/id\/d127ca69f2eea3ab20f5de9fa6265fee23267539495c340a2928555ab910f3f9\/type\/si_news\" target=\"_blank\" rel=\"noopener noreferrer nofollow\"><span style=\"font-weight: 400;\">here<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0 \u00a0 \u00a0<\/span><\/p>\n<h2>1. Vividthree Holdings Limited IPO Details<\/h2>\n<p><span style=\"font-weight: 400;\">The IPO will close at <\/span><b>12pm on 20 September 2018<\/b><span style=\"font-weight: 400;\"> (Thursday) and expected to commence trading on <\/span><b>25 September 2018<\/b><span style=\"font-weight: 400;\"> (Tuesday). <\/span><\/p>\n<p><span style=\"font-weight: 400;\">The company is placing 51.8 million new shares at a price of S$0.25 a piece during the IPO period. The total number of issued share in the company immediately after the placement will be 334,011,764 shares. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unfortunately, the IPO is not made available to the public and its prospectus did not provide any information about the cornerstone investors. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">That said, Mr Long Jong, Non-Executive Director &amp; Mr Ang Wee Gee, the brother of Mr Melvin Ang intend to subscribe for 200,000 and 1,200,000 placement shares.\u00a0<\/span>Fyi, Mr Melvin Ang is the executive chairman of mm2 Asia.<\/p>\n<h2>2. Vividthree&#8217;s Business Segments<\/h2>\n<p><span style=\"font-weight: 400;\">The company comprises 2 main business segments, namely content production and post-production. <\/span><\/p>\n<p><b>Post-Production<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Under the segment, Vividthree provides their clients creative input and technical solution through a range of post-production services. The company is specialising in visual effects, computer-generated imagery services and other post-production services. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are some of the services that Vividthree provides, with subject to clients\u2019 need: <\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Providing creative input, including working with producers, directors, scriptwriters and cinematographers to conceptualise and develop optimal live or camera shots for the visual effects<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Script development and storyboarding<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Selection of cast, crew and voice-over artistes<\/span><\/li>\n<\/ul>\n<p><b>Content Production<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Besides that, Vividthree owns a in-house content production business. In fact, this business segment was only started out in the beginning of FY2018 and since then, posted a larger revenue contribution to the company. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">With the in-house content production business, the company are able to develop their own digital intellectual property assets or acquire them from third parties to produce virtual reality products such as thematic tour shows. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In March 2018, the company entered into a binding term sheet with Contents Panda to develop a virtual reality thematic tour show based on the film \u201cTrain to Busan\u201d. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to the management, they are one of the few companies in Asia with the capability to integrate engaging VR content with hardware devices and produce thematic tour show sets. <\/span><\/p>\n<p><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Train-to-Busan.jpg\"><img decoding=\"async\" class=\"alignnone size-full wp-image-4740\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Train-to-Busan.jpg\" alt=\"\" \/><\/a><\/p>\n<h2>3. Use of Proceeds<\/h2>\n<p><span style=\"font-weight: 400;\">Vividthree Holdings will raise a gross proceeds of S$12.95 million upon listing. Around S$1.77 million of the proceeds will go towards listing expenses, which is roughly equivalent to 13.67%. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Minus off the listing expenses, the company will ended up with S$11.18 million, \u00a0in which S$7.8 million will be allocated for general working purposes while the other S$ 3.35 million are set aside for business expansion through acquisitions or joint ventures. <\/span><\/p>\n<p><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Listing-Expenses.jpg\"><img decoding=\"async\" class=\"alignnone size-full wp-image-4741\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Listing-Expenses.jpg\" alt=\"\" \/><\/a><\/p>\n<h2>4. Financial Highlights<\/h2>\n<p><span style=\"font-weight: 400;\">The company reported steady growth in revenue and net profit over the past 3 years. The revenue has increased from S$ 3.96 million in FY2016 to S$7.06 million in FY2018 at a compounded annual growth rate of 34%.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">From the diagram below, we can see that the revenue contributed by Post-production segment for FY2018 has dropped to S$2.86 million from the peak of S$5.29 million in FY2017. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, the declining revenue was offset by the content production segment, which contributed S$4.20 million to the company.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For the decline in revenue from post-production business, the management stated it was due to more emphasis being placed on content production, which provides a <strong>higher gross margin<\/strong>. \u00a0\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Revenue-Growth-Rate.jpg\"><img decoding=\"async\" class=\"alignnone size-full wp-image-4742\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Revenue-Growth-Rate.jpg\" alt=\"\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\">In tandem with the growth in top line, the net profit attributable to the equity holders recorded a growth of 39% compounded annually from S$1.41 million to S$2.71 million in the same period.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Net-Profit-Growth.jpg\"><img decoding=\"async\" class=\"alignnone size-full wp-image-4743\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Net-Profit-Growth.jpg\" alt=\"\" \/><\/a><\/span><\/p>\n<p><span style=\"font-weight: 400;\">After assessing its balance sheet, Vividthree seems to be a cash-rich company. With a total debt of S$0.13 mil and a cash and cash equivalent of S$ 2.35 mil, the company is sitting on a net cash of S$2.228 mil in FY2018.\u00a0\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Balance-Sheet.jpg\"><img decoding=\"async\" class=\"alignnone size-full wp-image-4744\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2018\/09\/Balance-Sheet.jpg\" alt=\"\" \/><\/a><\/p>\n<h2>5. Future Prospects<\/h2>\n<p><span style=\"font-weight: 400;\">With the advent of virtual reality to the public, the entertainment industry has been changed significantly in the past few years. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">There also has been an increasing trend of immersive entertainment and media in the form of multi-sensory experience for individuals or groups at any physical location. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">With the help of virtual reality technology, it is now possible for us to have inanimate objects appear animate in a three-dimensional space. \u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">By tapping into the growth of virtual reality, the company aims to build up their own digital intellectual through additional development of virtual reality products and other immersive experience. These include thematic tour shows, educational materials and video games. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">As of 17 August 2018, the company has an order book of approximately S$1.5 million, based on signed contracts, confirmed quotations and orders for ongoing projects. <\/span><b>\u00a0<\/b><\/p>\n<h1><strong>Conclusion<\/strong><\/h1>\n<p><span style=\"font-weight: 400;\">With a market capitalization of <strong>S$83.5 million upon listing<\/strong> and a net profit of <strong>S$2.7 million in FY2018<\/strong>, this translates to a whopping historical <strong>PE of nearly 30 times<\/strong>! <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Furthermore, the company do not plan to pay any dividends in the future to allocate their funds for future growth. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In a nutshell, Vividthree is not for the faint-hearted. Its high valuation is justified with its future growth plans to tap on the exponential growth in the VR industry and dynamic content production. <\/span><\/p>\n<p><!--more--><\/p>\n<p>Fancy a simple 10-Step System that teaches you how to investing profitably? Simply click here to receive your copy of a brand-new <strong>FREE<\/strong> <strong>Ebook<\/strong> titled &#8211; <strong><em>\u201c100 BAGGERS\u201d <\/em><\/strong><em>by Christopher W. Mayer<\/em> [thrive_2step id=&#8217;1969&#8242;]<strong><em><u>here<\/u><\/em><\/strong>[\/thrive_2step] today!<\/p>\n<p>Last but not least, do remember to <a href=\"https:\/\/www.facebook.com\/SmallCapAsia\/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\"><strong>Like us on Facebook<\/strong><\/a> too as we share the latest investing articles and stock case studies for you!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Vividthree Holdings can trace its history back to 2006, where they started out as a visual effects studio. Today, they are involved in creating content for the various platform by leveraging on the virtual reality (VR) technology. In addition to that, they also provide Post-production services, mainly in visual effects, computer-generated imagery, and other post-production [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4745,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[1,58,57],"tags":[420,615,616,617,618,69],"class_list":["post-4739","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-singapore-stocks","category-stocks","tag-sgx","tag-vividthree-holdings","tag-vividthree","tag-vivid3","tag-vividthree-ipo","tag-ipo"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/posts\/4739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/comments?post=4739"}],"version-history":[{"count":0,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/posts\/4739\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/media\/4745"}],"wp:attachment":[{"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/media?parent=4739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/categories?post=4739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hant\/wp-json\/wp\/v2\/tags?post=4739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}