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Synagie Corporation Ltd’s Initial Public Offering: What Investors Should Know

Synagie Corporation Ltd is seeking a listing on Singapore’s Catalist board. The company is Southeast Asia’s leading e-commerce enabler in the body, beauty and baby (BBB) sector. Here are 10 things that you should note about Synagie’s initial public offering (IPO):

1. According to its IPO prospectus, Synagie is the fastest-growing e-commerce start-up in Singapore and one of the fastest-growing in Southeast Asia. It posted revenue growth of a whopping 551.8% per year for the financial period from 28 November 2014 to 31 December 2015 till the financial year ended 31 December 2017. Synagie has over 250 brand partners in the BBB sector including well-known brands such as Johnson & Johnson, Kimberly-Clark and Shiseido.

2. Synagie has a platform-based, asset-light business model with three business segments – e-commerce, e-logistics and insurtech – that come together to offer innovative and efficient solutions to its brand partners.

3. The e-commerce segment helps the company’s brand partners to transform their traditional business to an online one. The e-logistics segment provides its brand partners with on-demand warehousing services and last mile delivery services. Lastly, under the insurtech segment, Synagie provides third-party administration solutions such as extended warranty, accidental damage protection, after-sales support and call centre services to its brand partners.

4. For the IPO, there will be a total of 43 million shares in offer, which comprises a placement tranche of 39.2 million shares and a public tranche of 3.8 million. The IPO is priced at S$0.27 per share.

5. Based on the IPO price and post-invitation share capital of 261.7 million shares, Synagie is expected to have a market capitalisation of S$70.7 million.

6. The listing is set to raise net proceeds of S$9.8 million. Synagie plans to use the money for business expansion (S$7.4 million) and working capital (S$2.4 million). Business expansion includes entering new geographical locations, investments in information technology capabilities, and mergers and acquisitions.

7. Even though Synagie’s revenue has grown tremendously over the past few years as seen earlier, it had posted losses during the same period. For the financial year ended 31 December 2017, it went into a deeper loss of S$3.4 million, as opposed to S$2.3 million in the previous year.

8. Synagie has also not been generating cash flow from operations for the financial period from 28 November 2014 to 31 December 2015 through to the financial year ended 31 December 2017. As of 31 December 2017, the company had S$1.8 million in cash and cash equivalents and S$2.9 million in convertible notes.

9. In the media release of his company’s IPO launch, Clement Lee, executive director and chief executive of Synagie, commented:

“With the phenomenal rise of E-commerce in SE Asia, we believe that the opportunity is to provide a seamless solution that would help brands and businesses shift online quickly. Our listing will give us the opportunity to grow faster by expanding further into the region, and leverage on our artificial intelligence and Big Data analytics capabilities to simplify commerce for businesses in SE Asia.”

10. The IPO opened on 30 July and closes on 6 August 2018 (12:00 pm). Trading is expected to commence on 8 August 2018 (9:00 am).

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.