NoonTalk debuts 2.3% higher before ending day at IPO price of S$0.22

MEDIA entertainment company NoonTalk debuted on the Singapore Exchange (SGX) Catalist board at S$0.225, 2.3 per cent above its initial public offering (IPO) price of S$0.22, before closing at its IPO price on Tuesday (Nov 22).

This gives the stock a market capitalisation of S$43.6 million. The counter trades at 1,946 times its FY22 net profit of S$22,407.

The company had earlier sold 22 million new shares, comprising 4.5 million public offer shares and 17.5 million placement shares. The offering raised gross proceeds of S$4.8 million, or S$3.3 million in net proceeds.

The company’s chief executive Dasmond Koh said it was heartwarming to see how people who have followed his progress over the years have come on board to invest in the company. 

He noted that some potential investors are in their early 20s and have been fans of his since he was a radio DJ with Chinese radio station Yes 933. 

“Hopefully for those who have not gotten their central depository (CDP) account, please go and get it so that later on, they can support us,” he said.

The offering of 22 million new shares at S$0.22 per share and the listing date of Nov 22 may not be a coincidence. Koh considers 22 to be his special number, having been born on Feb 22 and also the 22nd winner of the Star Awards All-Time Favourite Artiste award in April last year.

Koh owns 62.6 per cent of NoonTalk. Other notable investors in the company include liquefied natural gas player Union Energy Corporation, as well as Sheng Siong Group managing director Lim Hock Leng and Citic Envirotech executive director Dr Chong Weng Chiew. Chong was a member of parliament for the Tanjong Pagar GRC from 2001 to 2006.

The company reports its revenue in two segments: the management and events segment, and the production segment. The former is made up of services such as artiste management and events conceptualisation and management, while the latter is made up of services relating to multimedia creation.

NoonTalk has provided multimedia production services for events such as Chingay 2022 and ChildAid 2021, an annual charity in aid of The Straits Times School Pocket Money Fund and The Business Times Budding Artists Fund. The company has been appointed by the People’s Association to provide production services for Chingay 2023.

NoonTalk also produces films and television programmes, as well as video content for companies such as Shopee, Eu Yan Sang and Audi Singapore.

Koh said the company aims to strengthen its regional partnerships and expand into the Malaysian, Thai and Chinese markets.

It already released Thai-Singaporean anthology horror film The Antique Shop in Thailand, Laos and Cambodia in June this year, with a release date in Singapore set for Dec 1.

Despite NoonTalk encountering some challenges with its regional expansion, Koh said he remains confident that the company can continue to build relationships and gain experience.

In July last year, it collaborated with WeTV, a popular Chinese video streaming platform owned by conglomerate Tencent, to produce a Thai drama entited Dear My Happy Working Life. However, production of the drama ceased nearing its completion.

While the customer still paid for costs incurred by the company for producing the drama, it recorded zero gross margin on the project.

“Even knowing that probably, the margin won’t be too high, or there might not even be margin at all but for the project itself, it opens up a lot of channels and windows for us,” Koh said, adding that he hopes investors understand the intangible value of forming relationships through such projects.

Within the talent management business, he said NoonTalk will focus more on helping artistes from other regional markets enter Singapore and Malaysia, where the company is confident in its understanding of how these markets work.

NoonTalk is also looking to bring more talent in-house as gross profit margins compressed after it had to secure specialised video cameras, as well as hair and make-up services for artistes and participants when it took on the Chingay 2022 project.

“We channel a lot of the profit that we make into investing into elite manpower, so that we can bring a lot of things in-house and cut down on costs. Without all this, we cannot grow,” he said.

The company said it will devote 47.1 per cent of gross proceeds from the IPO to extending its regional footprint in existing business verticals, while 10 per cent would go into multimedia technology investment and another 10 per cent would go towards working capital. The balance will be used for listing expenses.

NoonTalk also intends to pay out 20 per cent of net profit after tax attributable to shareholders in FY23 and FY24.

Still, Koh said that he hopes investors invest in the company with more of a growth-driven mindset.

“I think quite a majority of (investors) understand that we are a media company, a pretty different trade...the dividend doesn’t hit them that much,” he said.

Evolve Capital Advisory was the sponsor, issue manager and co-placement agent for the IPO, while CGS-CIMB Securities (Singapore) was also a co-placement agent and underwriter.