Winking Studios to raise S$8 million via Catalist IPO at S$0.20 a share

GAMING-RELATED company Winking Studios is planning to raise S$8 million through an initial public offering (IPO) on the Singapore Exchange (SGX) Catalist, it announced on Wednesday (Nov 8).

The Singapore-headquartered company will do so by issuing 40 million shares at S$0.20 apiece, comprising 27.2 million placement shares, with the remaining shares issued through a cornerstone investment by Acer Gaming, and Acer’s chairman and chief executive officer, Jason Chen. Chen is the majority shareholder of Acer Gaming, which has a majority shareholding in Winking Studios.

The company will have a total of 279.7 million shares post-IPO, bringing its total market capitalisation to approximately S$55.9 million, says its prospectus lodged on SGX.

Winking Studios is a game-art outsourcing studio, with operations largely in China and Taiwan. It provides complete end-to-end art outsourcing and game-development services across platforms such as consoles, PCs and handheld devices for the video-game industry.

The company said it intends to use S$5.1 million of the proceeds to establish overseas subsidiaries and offices in Asia, and to increase its business development and marketing efforts in the US and Europe. It also plans to pursue strategic acquisitions, joint ventures and strategic alliances to grow its market share, and/or expand into new businesses, and to explore the use of artificial intelligence to improve and expand its art-outsourcing capabilities.

In the financial year ended December 2022, the group generated revenue of US$24.5 million, up from US$23.7 million the year before. Net profit, however, fell to US$1 million, from US$3.1 million over the same period. The company attributed this to fewer projects being contracted and completed in FY2022; this followed the Chinese government’s temporary suspension of the issue of new publication licences to game developers in late 2021.

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The company’s business has recovered some of its momentum since the lifting of the suspension, it added. In the first quarter of this year, revenue reached US$6.4 million, and net profit, US$0.6 million.

An independent market report ranked the company as Asia’s third-largest game-art outsourcing studio, and the fourth-largest globally, based on global revenue derived from game-art outsourcing in 2022. “Barring unforeseen circumstances, we expect the industry’s growth trajectory to be in line with the independent market report,” said Johnny Jan, chief executive and chairman of Winking Studios.

The placement will open on Nov 9, and close at noon on Nov 16. The listing and trading of its shares is expected to commence at the opening bell on Nov 20. This company is the sixth to list on the SGX this year, following the Catalist listings of Ever Glory United, Pasture Holdings, YKGI, Sheffield Green and Niks Professional.