Singapore karaoke operator Goodwill Entertainment launches Catalist IPO

SINGAPORE – Local karaoke and live show operator Goodwill Entertainment has completed its registration to list on the Catalist board of the Singapore Exchange (SGX) with its initial public offering (IPO) 1½ times oversubscribed, the company said on Oct 30.

Goodwill, which operates several entertainment venues including dance halls and family-friendly karaoke lounges, is offering 60 million shares at 20 cents each, comprising 42.5 million new shares and 17.5 million vendor shares, with none available for the public.

The company seeks to raise $12 million in gross proceeds from the sale of the new and vendor shares, and net proceeds of $9.8 million.

However, the company will not receive the proceeds from the sale of the vendor shares, which were sold by Mengkim, a controlling shareholder of the company.

Mengkim is a company incorporated in 2005. Its shareholders are Mr Thang Teck Jong, Goodwill Entertainment’s board vice-chairman and non-executive director, and his wife Kong Ling Ting.

Goodwill will receive just $6.45 million in net proceeds, which it will use to expand its business by opening more outlets in Singapore and exploring markets in South-east Asia, starting with Malaysia, its founder and chief executive Flint Lu told The Straits Times on Nov 1.

“In addition to karaoke lounges with food and beverage offerings, we are exploring complementary verticals such as developing and manufacturing house craft beers and establishing a food manufacturing plant,” Mr Lu said.

“This will reduce reliance on third-party suppliers and produce a range of food products tailored to the specific needs of our outlets, generating significant additional revenue and profit for the company.”

Mr Lu also said that the firm will be investing in artificial intelligence (AI) technology.

“The plan is for the AI system to simplify reservations, track memberships and past transactions, accumulate membership points, and handle redemptions,” he said, adding that the system will also study customer behaviour to deliver more personalised experiences.

Goodwill said in its final offer document that family offices Asdew Acquisitions and K-IX Capital, as well as financial advisory firm ICH Capital, are anchor investors. These comprise large institutions that typically buy shares at the upper end of the price band and are subject to a lock-in period.

The counter is expected to start trading on Nov 15, after applications for the shares close on Nov 13 at noon. It was last valued at $80 million.

Founded in 2015, Goodwill Entertainment currently operates 12 entertainment outlets in Singapore: 11 family-friendly karaoke outlets and one live show venue.

In 2023, the firm’s revenue surged to $23.9 million, up from $16.5 million in 2022.

It logged a profit after tax of $3.2 million in 2023 compared with a loss of $3.4 million in 2022, driven by increased demand for in-person entertainment as customers returned to karaoke outlets and live show venues following the easing of Covid-19 restrictions. In the first half of the 2024 financial year, Goodwill posted revenues of $23.2 million, nearly matching its full year revenue for 2023.

It expects listing and compliance costs to make a dent in its bottom line this year.

Mr Lu said that his company decided to pursue a listing on the SGX because Singapore is Goodwill’s “home base”.

He said: “The SGX is a trusted and respected exchange that provides excellent exposure to investors who are familiar with local and regional markets.

“Our brand has a strong presence in Singapore, and SGX gives us visibility among investors who understand the nuances of Singapore’s entertainment sector.”

Mr Lu added that Goodwill did not and does not have plans to pursue listings in other countries at the moment because the SGX is the right place for the company to grow, attract investment and build its reputation.

“SGX offers us proximity to our operations, partners and customers,” he said.

“While Bursa Malaysia or other exchanges may be more active in certain sectors, we believe that listing on SGX provides the right combination of investor sophistication and market access.”

Goodwill is the fourth company to undertake an IPO on the SGX in 2024.

Singapore Institute of Advanced Medicine Holdings, a cancer-treatment provider, listed here in February. This was followed by Japanese restaurant operator Food Innovators Holdings in October.

A third company, commercial interior designer and engineer Attika Group, registered its IPO prospectus on Oct 29.