SGX Market Updates

GHY Culture & Media – Entertainment & Content Producer in APAC – Lists on SGX


18 December 2020

  • GHY Culture & Media, an entertainment business that focuses on the production and promotion of dramas, films and concerts in the APAC region, made its debut on the SGX Mainboard.

  • GHY Culture & Media has successfully undertaken and produced a number of dramas (“The Little Nyonya”), films (“I Come From Beijing”) and concerts (“Jay Chou - Carnival World Tour”) since its inception in 2018, tapping on its established production teams of experienced directors, producers and scriptwriters in both the PRC and Singapore.

  • GHY Culture & Media does not have a fixed dividend policy, however, the Board intends to recommend dividends of at least 30% of its net profit after tax attributable to shareholders in FY2020 and FY2021.

GHY Culture & Media is an entertainment business that focuses on the production and promotion of dramas, films and concerts in the APAC region. GHY Culture & Media derives its revenue from four business segments:

  • TV Programme & Film Production (92% of FY2019 revenue) - Production of dramas and films, operated under three different revenue models:

    • Engaged by its customer for production by its Group for a fixed fee.

    • Developed for production by its Group and licensed or sold to its customer(s) for fixed fees.

    • Developed for production by its Group and licensed to its customer(s) for variable fees.

  • Concert Production (2% of FY2019 revenue) - Provision of concerts for well-known international artistes such as Jay Chou and established concert production teams based in the PRC and Singapore.

  • Talent Management Services (2% of FY2019 revenue) – Provision of talent management services for actors and actresses who are based, or whose projects and engagements are based in the PRC and/or Singapore.

  • Costumes, Props and Make-up Services (4% of FY2019 revenue) - Provision of such services to artistes and third party production companies.

GHY Culture & Media's Key Milestones

Highlights of GHY Culture & Media's IPO

1) Market Prospects
  • PRC Drama Series Market Size – Demand drivers include emergence of online video platforms along with the proliferation of the internet, accelerated export of PRC drama series, accumulated experiences about content operation and audience analysis of internet media, and profits from subscription fees, on-demand cuts and advertising income.

  • TV Channels and Online Video Platforms on Drama Series Investment (PRC) – Growth drivers include internet penetration in the PRC, continuous innovation such as interactive dramas, shifts in business models and use of end-user data for analysis of viewership and audience preferences.

  • PRC and Southeast Asia Concert Market Sizes – Demand drivers such as favourable government policy to stimulate recreation and culture, and robust economic growth in Southeast Asia and rising disposable income in the PRC.

GHY Culture & Media's Market size

Source: Frost & Sullivan

2) Competitive strengths
  • Proven track records on producing high-quality and well-received dramas and films – Commercial success of the dramas and films such as “The Little Nyonya”, “Perfect Village” and “The Frontliners”. These films were broadcasted and distributed on CCTV and/or iQIYI, and garnered positive reception, high viewership ratings and strong interest in the PRC.

  • Strong network of business relationships and lasting partnerships – TV networks, video streaming platforms and other production companies in the PRC and in the region, including Singapore.

  • Anchored by its founder and experienced key management – Executive Chairman and Group CEO, Mr Guo Jingyu is a notable producer, director and scriptwriter in the PRC with over 25 years of experience.

  • Growing portfolio of artistes – Secured the rights to undertake the production of concerts for Jay Chou in Singapore, Malaysia, Australia, Thailand, Japan and the PRC (excluding Hong Kong and Macau) either on a long-term basis or without any expiry in time.

3) Business Strategies
  • Expand its international reach and regional presence via entry into new markets, including TV programme and film production business and Concert production business.

  • Leverage on technological advances to expand and diversify pipeline portfolio of entertainment content and products.

  • Create synergies across its various production and talent management services business segments.

  • Nurture future talents and bolster the local talent pool in honing their directing, scriptwriting and producing skills.

Key Risks

  • Any changes or deemed violations to the PRC governmental restrictions on foreign investment with the contractual arrangements in respect of its PRC affiliated entities may have adverse impacts on the Group and business operations.

  • Unable to predict the commercial success of its dramas, films and/or concerts with certainty.

  • Dependent on third party TV networks and video streaming platforms for the broadcast and/or distribution of its dramas and films.

  • Dramas and films produced or co-produced by GHY Culture & Media are subject to laws and regulations relating to distribution and censorship.

  • (Page 20 of the IPO Prospectus shows a complete list of risk factors)

GHY Culture & Media's Financials & Valuation

  • Based on its audited combined financial statements, GHY Culture & Media's revenue for FY2019 was at S$66.0 million and revenue for 6M2020 was S$37.2 million. Profit attributable to owners of the companies for FY2019 was S$12.4 million while 6M2020 was S$13.0 million.

  • According to the IPO prospectus, GHY Culture & Media’s adjusted earnings per share (EPS) is at 1.16 Singapore cents for FY2019 and 1.21 Singapore cents for 6M2020. The price-to-earnings (P/E) ratio is 56.9x for FY2019 and 54.5x for 6M2020, based on the offer price of S$0.66.

  • GHY Culture & Media's does not have a fixed dividend policy, however, the Board intends to recommend dividends of at least 30% of its net profit after tax attributable to shareholders in FY2020 (excluding the interim dividends of S$10.0 million declared by the Board in FY2020) and FY2021.

GHY Culture & Media's Financials

Note: GHY Culture & Media has a short operating history beginning from 22 March 2018, and as such, the only audited combined financial statements included in the Prospectus cover FP2018, FY2019 and 6M2020, with FY2019 being the only full year for which financial information has been provided. In addition, it had limited operations in FP2018. As a result, the audited combined financial statements for FP2018 and FY2019 are not comparable to one another.

Additional information from the IPO Prospectus

GHY Culture & Media's IPO Details

  • Offer price at S$0.66 per Offering Share.

  • Total number of Shares offered at 21.7 million shares.

    • 18.7 million shares in the Placement
    • 3.0 million shares in the Public Offer

  • Estimated IPO Market Capitalisation at S$708.7 million.

  • Use of gross proceeds due to GHY Culture & Media from the issue of New Cornerstone Shares (Total of S$121.7 million):

    • S$64.5 million – Expansion of its TV programme and film production business via investment in production, acquisitions, joint ventures and/or strategic alliances.
    • S$21.5 million – Expansion of its concert production business via investment in production, acquisitions, joint ventures and/or strategic alliances.
    • S$15.0 million – General working capital purposes.
    • S$6.5 million – Issue expenses.

  • (The net proceeds from the Offering and the issuance and sale of the Cornerstone Shares (after deducting underwriting commissions and the estimated offering expenses, but excluding any discretionary incentive fees, where applicable), will be approximately S$115.1 million, of which approximately S$101.0 million will be due to the Group.)

GHY Culture & Media's Cornerstone Investors

Immediately post the offering and redemption, GHY Culture & Media's cornerstone investors will collectively hold approximately 162.7 million shares, representing a 15.2% interest. These cornerstone investors are:

  • Epical Entertainment Limited
  • Hong Kong Chixin Investment Co.
  • ICH Capital Pte Ltd
  • iQIYI International Singapore Pte. Ltd.
  • King Kong Media Production Pte. Ltd.
  • Mr. Ron Sim Chye Hock
  • Songful Global Investment Ltd
  • Qilin Asset Management Pte. Ltd.
  • V3 Brands Pte. Ltd.
  • Yinson Capital Pte Ltd

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