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.
Comments
'Last financial year, Artivision earned full-year revenue of more than $277,000 and gross profit of $82,000. (http://938live.sg/portal/site/938Live/menuitem.43735da1634c4377d21b2910618000a0/?vgnextoid=6e665b3088c9b110VgnVCM1000001f0aa8c0RCRD&mcParam=6f33638896593110VgnVCM100000e101000aRCRD)
Thank you.
For Artivision, is there a way to measure its prospect other than its financial statements? What I do understand is that computer vision technology will be the next big thing and there are only a few companies that are actively developing this technology. For ArtiVision to be a singapore based company that is developing this technology, does it mean anything?
What are the things we should look for when we're assessing new companies, particularly those in high tech?
In a way, i'm also an insider because I do research in computer vision. What I lack is an overview of the market because i'm only equipped with a little technical knowledge. I guess i have to work on that somehow but I really have no background in business.
However, it is still exciting to know there's a singaporean company doing video analytics. I might be keeping a close watch on this company.
As another poster said, their technology is really no big deal. Other companies have been out there selling mature competing products for years. They cannot articulate how different their product is (better accuracy, faster response?). No point harping about the form factor (appliance) or what it can recognize (objects) when it can't articulate why people should pay for it.
This company should never have gone IPO. Or even be allowed to go IPO. Those who buy in at IPO are basically handing their money over to pay for the CEO, CTO etc and their drivers/cars.
I would speculate that some of the recent pre-IPO investors have gone in with the provision that the company goes IPO on Catalist within a certain time, so that they can cash out.
I am also guessing there might have been some inside view that this is the right time to take advantage of the newness of Catalist and the eagerness of sponsors and SGX to make it work. Which allows them to call this an IPO and pass the buck to clueless investors.
Even with a 12-month lockout, most of the pre-IPO investors are probably betting and hoping that the the share price will not drop beyond a certain amount. So most will still clear some profits. And definitely a windfall for the founders (at cost of 0.23 cents...)
I don't think there is any share divestment schedule committed by any of the shareholders, so look for the shares to be dumped after the lockout.
In the meantime, this is a penny stock purely for making money on the price movements, not about its revenue or technology prospects.
Michael