Sunday, 10 August 2008
Artivision Technologies Ltd.
The Company is principally engaged in the development and provision of video managment products and solutions. The Company is offering 75m New Shares at $0.20 each to be listed on the Catalist. The Company generated sales of US$277,217 and made a loss of US$3.6m for FY2008 (31 March 2008).
Algotech Holdings Ltd (owned by the founders, effective cost is 0.23 cents), Tembusu Growth Fund Ltd (effective cost is 8.22 cents and 45% owned by Andy Lim, husband of Minister Lim Hwee Hwa and substantial shareholder of AdvSCT) and Mlmzar Holding Ltd (effective cost 13.30 cents) will collectilvey own around 53.9% of the Company post-ipo. The market cap is US$95m. David Loh and Han Seng Juan, the top stock brokers in Singapore also hold stakes of 3.53% each in this Company post IPO. All the shareholders have undertake not to sell their shareholdings in the Company for a period of 12 months post its listing.
It is ridiculous to note that the directors (or co-founders) and some executive officers are paid large salaries between $250k to $500k when the Company is not even revenue-generating yet and that is the main reason behind the losses for FY2008. While it is common to receive share options in lieu of cash, it is hardly common to receive huge cash when the Company is still not successful yet.
Frankly i dont think the technology is anything impressive. There are many companies globally that are engaged in this technology and some can be found in Israel and in Taiwan. The key issue will be Execution and sales ramp up. In my personal opinion, the risk of investing in this Company is high and can be rewarding only if sales can take off in a meaningful way. This company is ground-breaking in a sense that it is listing on Catalist with such little revenue (less than US$1m) and a larget loss (US$3.6m). I will also give it a ground breaking rating of zero chillis. Avoid this IPO.