Goodwill Entertainment Holding (SGX: GEH), a Singapore-based multi-entertainment company, made its debut on the Singapore Exchange’s Catalist board on 15 November, Friday.
Its initial public offering (IPO), which comprised 60 million placement shares at S$0.20 per share, was 1.5 times oversubscribed.
Here are five things you should know about Goodwill Entertainment Holding before considering investing in it.
#1 What’s Goodwill Entertainment’s Business About?
Goodwill Entertainment Holding is a premier multi-entertainment company known for its dynamic range of offerings under the “HaveFun” brand.
Their venues cater to a broad demographic, offering diverse entertainment options across languages and genres, with unique F&B and interactive experiences.
The company has two main business segments, and they are:
- Karaoke Lounges & Multi-Entertainment Venues
- Live Show Concept
Under the “Karaoke Lounges & Multi-Entertainment Venues” business segment, it operates 11 karaoke outlets in Singapore under the “HaveFun Family Karaoke” brand. HaveFun is Singapore’s largest family-friendly karaoke and multi-entertainment venue. These outlets offer a vast selection of songs in over 12 languages, including English, Thai and Chinese.
To enhance the experience, HaveFun provides various themed karaoke rooms and a range of amenities, including private cinemas, pool tables, and gaming consoles.
Goodwill Entertainment’s flagship outlet at Cineleisure Orchard features its first dance club, “FATEbyhavefun,” allowing customers to seamlessly transition from karaoke to dancing for a complete night out.
Meanwhile, its “Live Show Concept” segment comprises of the group’s latest venture, “HaveFun Live Show,” a unique live entertainment venue in Singapore for close-up performances and interactions with various artistes.
#2 How Did Goodwill Entertainment Perform Financially?
Now, let’s take a look at how Goodwill Entertainment has performed financially with a snapshot of the company’s financial performance over the past three financial years (the company has a 31 December year-end).
Source: Goodwill Entertainment IPO prospectus
From FY2021 to FY2023, the company’s revenue rose from S$0.9 million to S$23.9 million. The huge increase in revenue for FY2022 and FY2023 compared to FY2021 was largely on the back of the relaxation of COVID-19-related restrictions. This led to increased demand for local entertainment venues compared to FY2021. Due to the increase in its overall revenue during the time frame, the group’s net profit also increased.
Revenue for 3M2024 rose 78% year-on-year to S$8.9 million, with the “Live Show Concept” business segment, which started in February 2024, contributing significantly for a month.
Source: Goodwill Entertainment IPO prospectus
While the group does not have a fixed dividend policy, its directors intend to recommend and distribute dividends of up to 30% of its net profit for FY2024 and FY2025.
#3 What Are Some Risks For Goodwill Entertainment To Take Note Of?
It is always important to consider the risks before investing in any company.
Some potential risks for Goodwill Entertainment include competition from other entertainment establishments, changes in consumer preferences, and economic downturns.
In terms of competition, due to low barriers to entry and a pro-business environment in Singapore, there are many other karaoke, entertainment, and F&B businesses that compete directly and indirectly with the group. If Goodwill Entertainment cannot compete effectively, its financial performance and overall position could be negatively impacted.
#4 How Does Goodwill Entertainment’s Growth Prospects Look Like?
The IPO raised S$6.5 million in net proceeds, with the bulk of proceeds being used to expand Goodwill Entertainment’s business around the globe, broaden its existing business verticals, and for inorganic growth such as acquisitions.
The company plans to open a food manufacturing plant in Woodlands to standardise the food and beverage quality across its business. While many of its venues have their own kitchens, a central kitchen will ensure consistent offerings.
Additionally, the company will launch its own craft beers brewed in its microbrewery located at the HaveFun Karaoke outlet at Cineleisure Orchard.
Beyond these initiatives within Singapore, Goodwill Entertainment is exploring geographical expansion across the Southeast Asia (SEA) region by opening new outlets in major SEA cities with an initial focus on expanding its operations to Malaysia.
#5 What Are Goodwill Entertainment’s Share Price and Valuation?
On Friday, Goodwill Entertainment made its trading debut at S$0.21 per share, 5% above IPO price. However, the shares closed the day flat at S$0.20 each.
At a share price of S$0.20, Goodwill Entertainment is selling at a price-to-earnings (P/E) ratio of around 25x.
Read Also: 5 Singapore Companies That You Buy Products From, And Why You May Also Want To Buy Their Stocks
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