Nanofilm Technologies International IPO: Here's What Singaporeans Should Know
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Nanofilm Technologies International IPO: Here's What Singaporeans Should Know

profileJoel Koh
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Quick question.

What comes to mind when I mention the words successful Singapore based company?

welcome to singapore pirates of the caribbean
Source: Pirates of the Caribbean | Tenor

Chances are you might be thinking about companies like SEA Ltd. (NYSE: SE), Razer Inc (HKG: 1337), DBS (SGX: D05) or CapitaLand Limited (SGX: C31).

Well, it turns out there are still some hidden gems like Nanofilm Technologies International, which has launched its initial public offering (IPO) today.

The company is looking to raise gross proceeds of around S$470.1 million, making it one of the biggest non-real estate investment trusts (REITs) mainboard listings here in years.

The company would also become the first Singaporean tech unicorn (startups valued at more than US$1 billion) to list in Singapore.

Here’s what you should know about the upcoming mega IPO.


Nanofilm Technologies IPO Information 

With gross proceeds of S$470.1 million raised from the IPO, Nanofilm Technologies plans to reinvest it into its businesses by spending on research and development (R&D), investing in engineering and expanding production capacity.

In addition, the company will use the capital for corporate and cash-flow/working capital purposes.

For the IPO, Nanofilm Technologies has reached an agreement with 13 cornerstone investors who have subscribed to purchase about 104.3 million of the company’s shares that are worth about S$270 million.

These investors include the likes of:

  1. Aberdeen Standard Investments (Asia)
  2. AIA Investment Management
  3. Credit Suisse AG
  4. Lion Global Investors
  5. Fullerton Fund Management
  6. Nikko Asset Management Asia
  7. JPMorgan Asset Management (Singapore) and
  8. Venezio Investments Pte. Ltd. (Wholly owned Temasek subsidiary)
  9. And more…

Another interesting thing to note is that if the sale of cornerstone shares and IPO is successful, Temasek will become a significant shareholder in the company.

This is because Temasek’s Vanda 1 Investments and Orchid 2 Investments under Heliconia (a unit of Temasek) hold Nanofilm’s convertible notes.

Before the listing, the notes will be converted to shares.

Nanofilm Technologies IPO Timeline

Here’s the timeline for Nanofilm Technologies IPO:

Important events for Nanofilm Technologies IPOTime and date
Offering priceS$2.59 per share
Opening time and date of IPO23 October 2020, 6pm
Closing time and date of IPO28 October 2020, 12pm
Balloting of applications for IPO29 October 2020
Commence trading30 October 2020, 9am

Nanofilm Technologies International Background

Nanofilm was started by CEO and founder Dr Shi Xu.

Dr Shi Xu Nanofilm CEO
Source: The Peak Magazine, Singapore

Shi left his comfy as an associate professor at Nanyang Technological University’s (NTU’s) School of Electrical and Electronic Engineering to start Nanofilm in 1999.

With just S$300,00 in startup capital, Shi ventured out to start the company as an opportunity to bring his research to the real world.

Today, the company employs over 1,400 employees, in Singapore, Japan, China and Vietnam, serving over 300 clients across various industries, including the likes of Canon, Huawei, Fuji Xerox, Microsoft and Nikon.

The company specialises in advanced materials, industrial equipment and nanofabrication; with applications in solar panels, smartphones, automobiles and cameras.

For example, the company’s patented filtered cathodic vacuum arc (FCVA) inline coating system technology remains the gold standard in the vacuum coating industry; as evidenced by the company owning 70 per cent market share in the sector.

According to Reportlinker, a French technology company that runs a professional search engine aggregating authoritative publicly sourced data in one place; the global nanofilm industry is big.

The global nanofilm industry is set to grow to be worth over US$5.1 Billion by the year 2025.

As the world’s second-largest economy and the new game-changer in global markets, China nanofilm market exhibits the potential to grow at 13.3 per cent over the next couple of years and add approximately US$774.9 Million in terms of addressable opportunity.

Several macroeconomic factors and internal market forces will shape the growth and development of demand patterns in emerging countries in Asia-Pacific.

Thus, Nanofilm still has room to grow.

However, the company will have to compete with competitors like Advanced Thin Films, Cosmo Films Ltd. and Metatechnica; Nano Labs.

Nanofilm Technologies’ Financials

It appears that Nanofilm is capitalising on this opportunity as the company is steadily growing its net profit and revenue.

Growth Insecure on HBO
Source: Giphy

Financial highlights

For FY2019 (ended 31 Dec 2019), the company recorded a net profit of S$35.8 million, up 22.2 per cent from S$29.3 million in FY2018.

During the same time period, the company also grew its revenue by 16.4 per cent to S$142.9 million.

For the first half of 2020, the company recorded a net profit of S$18.5 million, up 62.3 per cent from S$11.4 million a year before.

During the same time period, the company grew revenue by 40.9 per cent to S$77.8 million.

Dividends

As for dividends, the company paid out an interim dividend of 1.9 Singapore cents per share on 2 July 2020. But, it will not be paying out any dividends for the rest of FY2020.

At the moment, the company does not have any formal dividend policy.

But, the board of the company will recommend to distribute dividends of a minimum of 20 per cent of the company’s net profit after tax (not inclusive of exceptional items) recorded in FY2021, as a way to recognise the contributions of shareholders who have played a part in the company’s growth.

What Are Your Thoughts on the Nanofilm IPO?

If you have any questions about Nanofilm Technologies International and other stocks in general, why not head over to the SeedlyCommunity to discuss them with like-minded individuals?

Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock.

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About Joel Koh
History student turned writer at Seedly. Before you ask, not a teacher. My time as a history student has equipped me with the skills to evaluate the impact societal development has on financial and nonfinancial events.
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