Nanofilm IPO turns former NTU professor into a billionaire

Dr Shi, 56, founded Nanofilm in 1999 with US$300,000.
Dr Shi, 56, founded Nanofilm in 1999 with US$300,000.PHOTO: NANOFILM TECHNOLOGIES

SINGAPORE (BLOOMBERG) - Dr Shi Xu once said that financial stability and job security were the two dreams he and his wife had when they moved to Singapore from China in the early 1990s. After almost three decades, they have become billionaires with the listing of their company, Nanofilm Technologies International.

The provider of nanotechnology solutions for smartphones and other electronics opened at $2.77 from its initial public offering price of $2.59 a share and rose close to 13 per cent in early Singapore trading. Dr Shi's fortune, mainly made up of the 53 per cent Nanofilm stake he holds with his wife, has surged to almost US$880 million (S$1.2 billion), according to the Bloomberg Billionaires Index. The company declined to comment on the couple's wealth.

The IPO raised more than $470 million, taking the company's market value to $1.9 billion and marking the largest primary listing on the Singapore exchange since 2017 excluding real estate investment trusts, for which the city-state is a global hub. It adds to the growing list of tech-related start-ups that have mushroomed there in the past decade.

"Nanofilm is a rare technology manufacturing IPO on SGX in recent years, bringing a fresh perspective for local investors," said Margaret Yang, a strategist at DailyFX. With computers and wearable devices its main revenue drivers and more than 70 per cent of sales coming from China, the company is set to benefit from the growing demand for digital devices amid Covid-19, she said. "It may attract other locally-incubated tech firms to consider listing at home," she added.

Dr Shi, 56, founded Nanofilm in 1999 with US$300,000. It started as a tech start-up spun off from Singapore's Nanyang Technological University, where he worked as an associate professor, after Japanese conglomerate Hitachi sought to adopt Dr Shi's coating technology to its hard-disk drives. As NTU decided to create a company to commercialize the technology, the school asked him to lead it. Dr Shi said in an interview with a local magazine in 2018 that he was "'forced' to go into business" and initially negotiated to take no-pay leave from the university for two years as a backup plan.

Now Nanofilm has more than 1,400 employees in offices in Singapore, Japan, China and Vietnam. Its revenue climbed more than 40 per cent in the first half of the year, after growing 16 per cent in 2019, according to its IPO prospectus. While the firm's main customers include Fuji Xerox, Microsoft and Huawei Technologies, it noted that the reliance on its largest client, a tech company it didn't disclose, could be a risk factor - it generated more than half of last year's sales.

The offering's 13 cornerstone investors include Aberdeen Standard Investments (Asia), Credit Suisse, JPMorgan Asset Management (Singapore) and Venezio Investments, a wholly owned subsidiary of Temasek Holdings. Temasek itself will be a substantial shareholder following the completion of the listing and sale of cornerstone shares, the prospectus showed.

The former professor has no regrets for leaving the academic life, which his wife, Jin Xiao Qun, viewed as an "iron-rice bowl" - or stable, as per a Chinese saying. She is the company's assistant vice president.

"Business is so much more challenging, compared to teaching," Dr Shi told The Peak magazine in 2018. "If you asked me to go back, I might feel bored."