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IPO Chilli Ratings

IPO Chilli Ratings
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Winking Studios Limited

For Information Only - Offer via Placement closed on 15 Nov 2023 Winking Studios Limited ("Winking" or the "Company") is offering 27.2m Placement Shares at $0.20 each and concurrently 12.8m Cornerstone Shares for a listing on Catalist. The IPO closed on 16 Nov and will start trading on 22 Nov. As there is no public offering, I will lodge this for records purposes. Winking is one of Asia's largest game art outsourcing studios and an established game development company (The 3rd largest per the prospectus). The Company has more than 25 years of experience and is headquartered in Singapore with seven studios across Nanjing, Shanghai and Taipei and over 700 employees. The Company is majority owned by Acer Gaming, which is part of the Acer Group, which has an extensive network of relationships in the art outsourcing and game development industries. The Company has developed and collaborated on internationally renowned game titles and projects, including Assassin'

Starburst Holdings Limited

Starburst Holdings Limited ("Starburst" or the "Company") is offering 50m shares at $0.31 each for its initial public offering. 48m shares will be via placement and 2m shares will be via public offer. The IPO will close on 8 July 2014 at 12pm. The prospectus is here. The market cap post IPO will be around S$77.5m

Principal Activities

The Company is a Singapore-based engineering group specializing in the design and engineering of firearms training facilities with a 15 years track record. The facilities are used by law enforcement, securities agencies and civil authorities in Southeast Asia and the Middle East. Those who served the Army like you and me should know their facilities quite well!?!?

The Company intends to focus on larger projects with bigger complexity, grow its brand and marketing in Middle East, grow its maintenance service business income (recurring income).

Use of Proceeds

At least in this case, the proceeds are properly utilized in acquiring land and buildings and for general working purposes rather than to pay for the advisers as professional fees


The EPS registered a strong growth of more than 34% over the prior year. Based on the post-invitation 250m shares, the EPS for FY2013 is 3.49 Singapore cents and that translate into a historical PER of 8.8x. The order book as of the prospectus is around S$45.8m.

Proposed Dividends

The Company intends to pay out at least 20% of its profit after tax for the financial year ending 31 Dec 2014 as dividends. Assuming EPS remains the same (for conservative reasons), 
DPS = EPS of 3.49 cents x 20% = 0.698 cents and that translate into a yield of 2.25%.


The two founders continue to hold 80% of the Company with the balance small float held with the public. According to my source, the placement is significantly subscribed by Alan Wang from Asdew (not sure if true or not, we shall see next week when the IPO results is out). 

It is easy to place out the shares to strong hands. If the above information is true, then we are in for a rolling good time. The IPO should perform very well post listing date.

It is good to see the Company being transparent about the pay of its executives. Both of them draw $360,000 each year with additional 3 months bonus. There will be a profit sharing bonus as well to align the interest should the company do well.

What I like about Starburst
  • An established player in a niche business where the barriers to entry is high for competitors due to the specialized knowledge involved.
  • Good paymasters. Given this is a very controlled sector, the clients are usually government and law enforcement agencies. The risk of default is probably low.
  • Proprietary trademarked anti-ricochet ballistic protection materials helped improves margins and extend the lives of the facilities.
  • The era in which we live in post 9-11 has always been one focused on improving security. If you are a frequent traveler, you will know what a hassle it is to clear the security customs, especially in certain countries. This probably means the demand for and the willingness to spend on security related budget will continue to increase.
  • The two founders are not selling a single share at the IPO and continue to be strongly vested in the business
  • SEA and Middle East (unfortunately) seemed to be in the sweet spot for the business.

My Concerns
  • The reverse is true for niche business. Any loss of major contracts will be detrimental to the firm's prospect and business.
  • The world becoming more peaceful and the spending on security reduces? (unlikely) 
  • The two founders "fell out" after the IPO. This happens to some of the companies once they become successful. Given that both founders are 56 and 50 respectively, another concern will be the succession plans.
  • This is a small cap company with tiny revenue and the small public float means liquidity is limited.

My fair value

Assuming EPS grow by 25% (i am purely guessing) 3.49 x 1.25 = 4.36 and a fair value range of 8-10x, the price target will be around 35c to 44c. 

My ratings

Given that this is a small cap company going for IPO, i am actually quite surprised to see DBS Bank taking on this assignment. DBS is usually very discerning and selective in their IPO pipeline and they don't usually take on small clients unless they believe the firm have good growth potential (unless the mindset has changed). As such, i view it positively that DBS is the underwriter and backer and i like the fact that they are conducting a public tranche for retail investors like you and me! Thank you DBS. 

The IPO is priced reasonably and i believe the Company does have some growth prospects if it is able to execute its strategy. I understand from sources that the placement is very hot. Given that there is only 2m shares, it will only make sense if you apply for a lot of shares at the ATM and "pray that" they allocate more shares to you. 

I will give it a 3 Chilli ratings since this is the first IPO with public tranche after such a long hiatus! Thank you DBS and HOOT ah.....


Investopenly said…
Wah! 辣,辣,辣!(spicy)
Mr. IPO said…
:) 不辣不爽
Zee said…
Re your last point, smaller IPO subscribers would actually stand a higher chance if the allocation strategy mandated by the incumbent owners is to avoid majority shareholders
Anonymous said…
As individual, which shld I be looking at, the balloting ratio or the total % of shares alloted to public in the different tier? (I.e. more chance to get if balloting ratio is high, even though the % of a certain tier is lower to public?)

Anonymous said…
when can apply?
not seen on ibanking yet
Mr. IPO said…
I think the more you apply, the higher the balloting ratio. I will apply for 100 lots or more if possible to get allocation of 3-8 lots. Probably to get it should be quite low still. Haha so don't have to think too hard about this. Not all ibanking offer. For sure DBS ibanking should have it but not necessarily for other local banks.
Anonymous said…
Thanks for the very concised and condensed write-up again.
Mr. IPO said…
My pleasure. Thanks for dropping by and reading the article. ^_^

May I invite you to join our recently opened site - (We aim to create a community filled with useful, valuable and insightful discussions on finance and business related topics focusing on Asia).

I'm sure the community would be delighted to have you on board to kick start the forums!

Thank you and hope to see you there! :)
Unknown said…
Your article constantly possess a lot of really up to date info. Where do you come up with this? I like your post as i am interested in SGX Singapore and just declaring you are very creative. Thanks again.
Anonymous said…
Thanks for your info and update!
Mr. IPO said…
Thanks for the invite but it has been more than five years since I participated in any forum. ^_^ have fun.
Mr. IPO said…
Come join my Facebook community lah. :)