REG - Winking Studios Ltd - Proposed Acquisition
17/01/2025 07:15
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RNS Number : 7499T Winking Studios Limited 17 January 2025
WINKING STUDIOS LIMITED
(Company Registration No. 159882)
(Incorporated in the Cayman Islands)
17 January 2025
Proposed Acquisition of One of the Leading Game Art Outsourcing and
Development Studios in Asia
M&A Strategy Gains Momentum with the Group's Largest M&A Transaction
to date
Winking Studios Limited (AIM / SGX:WKS) (the "Company" and together with its
subsidiaries, the "Group"), one of Asia's largest AAA game art outsourcing
studios and an established game development company, is pleased to announce
the proposed conditional acquisition of Shanghai Mineloader Digital Technology
Co., Ltd. (the "Target", "Mineloader" or
"上海皿鎏數字科技有限公司" and together with its subsidiaries, the
"Target Group"), one of Asia's leading game art outsourcing and development
studios (the "Proposed Acquisition").
Funded from the Company's internal cash resources, the consideration payable
for the acquisition is approximately RMB 146 million (or approximately S$27.2
million or £16.3 million), of which the upfront payment is approximately
RMB131.4 million (or approximately S$24.5 million or £14.7 million), with the
balance to be paid on the fifth anniversary following completion of the
Proposed Acquisition subject to the satisfaction of certain conditions and
performance targets.
· With its business roots tracing back to 2003 when the Target Group
established its first studio, Mineloader is currently headquartered in
Shanghai and has developed integrated capabilities across three major gaming
platforms and expanded its workforce to 466 employees (as at 30 November 2024)
across three studios in Asia
· In its latest full audited period, Mineloader delivered EBITDA of
approximately S$3.6 million for the financial year ended 31 December 2023
("FY2023")(( 1 ))
· The majority of Mineloader's revenue is generated from game art
outsourcing services (an average of approximately 90% for FY2022 and FY2023)
and its strength in console platform games can provide more revenue diversity
for the Group
· With a reputable track record within the global gaming services
industry, Mineloader has established enduring working relationships with
blue-chip gaming clients globally, gaining more traction in Western markets in
recent years
· Spearheaded by industry veterans with extensive past experience at
renowned Japanese gaming companies, who will continue to lead the business of
the Target Group while benefitting from the Group's central resources and
expertise
· The Proposed Acquisition is expected to deliver increased scale across
Asia, new Western clients, and increased resources to deliver on the Group's
global ambitions
· Completion of the Proposed Acquisition is subject to certain conditions
precedent, as detailed below, which are expected to be satisfied before the
end of the second quarter of 2025
Accelerating Growth and Innovation with its M&A Strategy
Since its listing on the Catalist of the Singapore Stock Exchange in November
2023 and as detailed in its AIM Admission Document in November 2024, the Group
has embarked on an M&A strategy aimed at increasing its global presence
through the acquisition of companies that align with its sales growth,
capability enhancement, and global market expansion goals.
The Proposed Acquisition follows the two acquisitions completed in 2024 of
Taipei-based art outsourcing studio On Point Creative Co., Ltd. and Kuala
Lumpur-based Pixelline Production Sdn. Bhd, which together significantly
enhance the Group's resource base, service offerings and market reach.
Commenting on the Proposed Acquisition, Executive Director and Chief Executive
Officer (Founder) of Winking Studios Limited, Mr Johnny Jan (詹承翰),
commented:
"This marks our largest acquisition to date and represents a pivotal step that
augments our position in the global video games industry, unlocking new
horizons for growth and innovation."
"Game art is essential in a video game's development, serving as the visual
foundation and creative ingenuity that engages players and shapes their gaming
experience. Together with a reputable track record and a speciality in game
art production, Mineloader's team of more than 460 employees will be a
valuable addition to our Group's existing headcount of over 800, boosting our
service offerings in this segment and adding new clients. Mineloader's
established experience and presence in the Japanese market is also a notable
value add to our Group's business networks."
"Complementing Winking Studios' capabilities in online platform games,
Mineloader's strengths in console platform games can provide revenue
diversity. There are also opportunities for increased business synergies and
cross-selling, driving enhanced economies of scale and scalability."
"Driven by our global ambitions, we will continue to proactively explore new
M&A opportunities to enhance our value propositions across the value chain
of the global gaming services industry, delivering cost-effective solutions
for our Western and Asian gaming clients in different market segments."
Enquiries
Singapore UK
Winking Studios Limited Via Alma
Johnny Jan, Executive Director and Chief Executive Officer (Founder)
Oliver Yen, Finance Director and Group Chief Financial Officer
8PR Asia (Investor Relations) Alma Strategic Communications
Alex Tan Justine James / David Ison / Emma Thompson
+65 9451 5252 +44 (0)20 3405 0205
alex.tan@8prasia.com (mailto:alex.tan@8prasia.com) WKS@almastrategic.com (mailto:WKS@almastrategic.com)
PrimePartners Corporate Finance Pte. Ltd. Strand Hanson Limited
(Continuing Sponsor) (Financial and Nominated Adviser)
Foo Jien Jieng James Harris / James Bellman
sponsorship@ppcf.com.sg +44 (0)20 7409 3494
SP Angel Corporate Finance LLP (Broker)
Stuart Gledhill / Charlie Bouverat (Corporate Finance)
Abigail Wayne / Rob Rees (Corporate Broking)
+44 (0)20 3470 0470
About Winking Studios Limited (AIM and SGX: WKS)
Headquartered in Singapore and dual-listed on the London Stock Exchange and
Singapore Exchange (Trading Code: WKS), Winking Studios Limited is one of
Asia's largest AAA game art outsourcing studios and an established game
development company.
With over 20 years of experience and established track record, the Group
provides end-to-end art outsourcing, game development services and other
gaming services across various platforms for the global gaming industry via
its three business segments of Art Outsourcing, Game Development and Global
Publishing & Other Services.
The Group has nine studios across Singapore, Kuala Lumpur, Taipei, Shanghai,
Nanjing and Suzhou with over 800 highly skilled employees serving a global
customer base that includes 22 of the top 25 game publishers in the world.
For more information, please visit www.winkingworks.com
(https://protect.checkpoint.com/v2/___http:/www.winkingworks.com___.YzJ1OnJhamFoYW5kdGFubjpjOm86Mzg1MGRmYjQ2ZjFiMGRmNjhjNTI3NmVhY2ZkZmFlYTg6Njo5Y2JkOjAxMjgzOGE2OTIwN2VhZDE4NDJiOTIzNWIwOWMwOTBmN2Q0NmFiNzMxZmE4OTY4OGVlMThiYTljMmNjNTE0MzA6cDpGOk4)
.
PROPOSED ACQUISITION OF 100% OF THE EQUITY INTEREST OF SHANGHAI MINELOADER
DIGITAL TECHNOLOGY CO., LTD. (上海皿鎏數字科技有限公司)
1. INTRODUCTION
1.1 The Board of Directors (the "Board" or "Directors") of
Winking Studios Limited (the "Company", and together with its subsidiaries,
the "Group") is pleased to announce that the Company's wholly owned
subsidiary, Shanghai Winking Entertainment Ltd
(上海唯晶信息科技有限公司) (the "Purchaser") has on 17 January
2025 entered into conditional equity purchase agreements (the "Equity Purchase
Agreements") with Shanghai Mineloader Digital Technology Co., Ltd.
(上海皿鎏數字科技有限公司) (the "Target" and together with its
subsidiaries, the "Target Group"), and each of the existing 17 current
shareholders of the Target, namely Su Fang (苏方), Shanghai Dao Zhen
Business Consulting Co., Ltd.(上海道珍商务咨询有限公司),Huang
Yingyi (黄盈怡), Dongtai Runkun Tianlu Equity Investment Partnership
(Limited Partnership)
(东台润昆天禄股权投资合伙企业（有限合伙）), Changshu
Bothwin Investment Center (General Partner) (
常熟市博盈投资中心（普通合伙）), Guo Zanhua (郭赞华), Cai
Shiguang (蔡士光), Shanghai Mineloader Investment Management Co., Ltd
(上海皿鎏投资管理有限公司), Xu Zhen (徐臻), Kang Tianhao
(康添豪) , Wang Wei (王威), Li Shen (李申), Zhu Xinmiao (朱欣苗),
Zhang Yang (张洋), Zhang Yanyan (张艳艳), Guo Cong (郭丛) and Chang
Ning (常宁) (collectively, the "Vendors" and together with the Purchaser,
the "Parties"), in connection with the proposed acquisition of 100% of the
equity interest of the Target (the "Proposed Acquisition").
1.2 In connection with but separate from the Proposed
Acquisition, the Company and the Purchaser have also on 17 January 2025
entered into performance commitment and incentive agreements (the "Incentive
Agreements") with 10 of the individual Vendors who are also key management
personnel of the Target ("Key Management Personnel"), pursuant to which new
incentive shares in the capital of the Company (the "Incentive Shares")
amounting to a value of up to RMB23,992,100 (or approximately S$4.5
million(( 2 )) or £2.7 million(( 3 ))) in aggregate, will be issued over the
financial years ending 31 December 2025 to 31 December 2030, subject to the
fulfilment of performance targets and terms as prescribed under the Incentive
Agreements, further details of which are set out in section 3(b) of this
announcement (the "Announcement") below ("Incentive Arrangements").
1.3 The Proposed Acquisition is conditional upon the
satisfaction of certain conditions precedent set out in section 3(d) of this
Announcement below. A further announcement will be made at the time such
conditions are satisfied.
2. INFORMATION ON THE TARGET
The Target is a private company limited by shares incorporated in the People's
Republic of China (the "PRC") on 3 April 2019 with the unified social credit
code(( 4 )) 91310110MA1G8Y6WXJ and its principal business address being Room
301-304, No. 688, Dalian Road, Yangpu District, Shanghai, the PRC. The Target
Group provides a wide range of services to major game developers globally, and
such services include full level game production, game development, 3D
animation, and development of 3D assets and 3D characters.
With its business roots tracing back to 2003 when the Target Group established
its first studio, Mineloader is currently headquartered in Shanghai and has
developed integrated capabilities across three major gaming platforms and
expanded its workforce to 466 employees (as at 30 November 2024) across three
studios in Asia.
The majority of Mineloader's revenue is generated from game art outsourcing
services (an average of approximately 90% for the financial years ended 31
December 2022 and 31 December 2023 ("FY2023")) and its strength in console
platform games can provide more revenue diversity for the Group.
The Target Group is spearheaded by industry veterans with extensive past
experience at renowned Japanese gaming companies, who will continue to lead
the business of the Target Group, while benefitting from the Group's central
resources and expertise. The Target has built up a reputable track record
within the global gaming services industry, and has established enduring
working relationships with blue-chip gaming clients and gaining greater
traction in Western markets in recent years.
None of the Target, its subsidiaries or any of their respective directors and
shareholders, are related to any of the Directors, controlling shareholders,
Chief Executive Officer of the Company and/or their respective associates. As
at the date of this Announcement, none of the Target, its subsidiaries, their
respective directors or shareholders, holds shares, directly or indirectly, in
the Company.
3. DETAILS IN RELATION TO THE PROPOSED ACQUISITION AND THE
INCENTIVE ARRANGEMENTS
(a) Purchase Consideration
The aggregate purchase consideration payable by the Company in connection with
the Proposed Acquisition is up to RMB146,007,900 (or approximately S$27.2
million(( 5 )) or £16.3 million(( 6 ))), comprising the following:
(i) Pursuant to the Equity Purchase Agreements, an
upfront cash payment of RMB131,407,110 (or approximately S$24.5 million(( 7 ))
or £14.7million(( 8 ))) ("Upfront Cash Consideration"), shall be paid by the
Company to the Vendors on the date of completion (the "Completion", and the
date on which Completion takes place, the "Completion Date"); and
(ii) The balance purchase price of up to RMB14,600,790 (or
approximately S$2.7 million(( 9 )) or £1.6 million(( 10 ))) (the "Balance
Purchase Price") shall be paid to the Vendors after the 5(th) anniversary of
the Completion Date. The payment of the Balance Purchase Price is however,
subject to the Purchaser's right to deduct monies payable from the Balance
Purchase Price in the event the Target suffers losses, penalties or
liabilities, as prescribed under the terms of the Equity Purchase Agreements,
(collectively, the "Purchase Consideration").
(b) Incentive Arrangements
(i) Pursuant to the Incentive Agreements, Incentive Shares
amounting up to a value of RMB23,992,100 (or approximately S$4.5
million(( 11 )) or £2.7 million(( 12 ))) in aggregate shall be issued to the
Key Management Personnel based on the proportion specified in the Incentive
Agreements, and subject to, inter alia, the satisfaction by the Target and the
Key Management Personnel of performance criteria prescribed under the
Incentive Agreements, including targets relating to the annual net profit of
the Target Group for the financial years ending 31 December 2025 to 31
December 2029.
(ii) The issue price of each Incentive Share shall be
determined as follows:
I. The weighted average share price of the Company's shares
("Shares") trading on AIM of the London Stock Exchange denominated in GBP
across the period of 5 market days from the day immediately following the date
of the Company's announcement of the Proposed Acquisition on AIM of the London
Stock Exchange(( 13 )) (the "Announcement Date") (inclusive of the day
immediately following the Announcement Date) shall be ascertained as mutually
agreed amongst the Parties.(( 14 )) In addition, the Issue Price shall be
subject to:
1. the upper limit of 140% of the weighted average
share price of the Company's Shares trading on AIM of the London Stock
Exchange denominated in GBP for the market day immediately preceding the
Announcement Date, and
2. the lower limit of: (A) 60% of the weighted average share price
of the immediately preceding market day on AIM of the London Stock Exchange
before the Announcement Date; and (B) 90% of the weighted average share price
in SGD based on the trades done on the Singapore Exchange Securities Trading
Limited (the "SGX-ST") on the immediately preceding market day up to the time
the Incentive Agreements are signed(( 15 )), pursuant to Rule 811 of the
Listing Manual Section B: Rules of Catalist of the SGX-ST (the "Catalist
Rules") of the SGX-ST, whichever of (A) or (B) is the higher ("Lower Limit
Issue Price").
II. For the avoidance of doubt, the weighted average share
price should be calculated as follows: the total market value of the
transactions in the Company's Shares divided by the total transaction volume.
The Incentive Shares, if and when allotted and issued, shall rank pari passu
with all the existing Shares, save for any dividends, rights, allotments or
other distributions, the record date for which falls before the date of issue
of the Incentive Shares.
(iii) The Company will rely on the prevailing general share
issue mandate at the relevant time prior to the issuance of the Incentive
Shares, which is subject to renewal at the annual general meeting ("AGM"). In
the event that the general share issue mandate is not approved at an AGM or is
insufficient for any such issuance of Incentive Shares, the Company will then
seek specific approval from its shareholders ("Shareholders") for the issuance
of the Incentive Shares.
For illustrative purposes, assuming the fulfilment of all the performance
targets and terms of the Incentive Agreements, the Company will issue
Incentive Shares amounting to a value of up to RMB23,992,100 (or approximately
S$4.5 million(( 16 )) or £2.7 million(( 17 ))) in aggregate. Assuming an
indicative issue price of S$0.2735 (or approximately RMB1.4665(( 18 )) or
£0.1640(( 19 ))) per Incentive Share (which is not more than 90% of the
weighted average share price in SGD based on the trades done on the SGX-ST on
the immediately preceding market day up to the time the Incentive Agreements
are signed based on the Lower Limit Issue Price as set out in section 3(b)(ii)
of this announcement) (the "Illustrative Issue Price"), 16,360,336 Incentive
Shares will be issued by the Company, representing approximately 3.58% of the
enlarged issued and paid-up share capital of the Company following the
Proposed Acquisition and the issuance of the Incentive Shares.
(iv) The Company will apply to the SGX-ST through its
sponsor, PrimePartners Corporate Finance Pte. Ltd. for, inter alia, the
dealing in, listing and quotation of the Incentive Shares on the Catalist of
the SGX-ST. The Company will make the necessary announcements upon receipt of
the listing and quotation notice from the SGX-ST. In addition, an application
will be made at the relevant time for such shares to be admitted to trading on
AIM.
(c) Basis of the Purchase Consideration and Incentive
Arrangements
The Purchase Consideration and Incentive Arrangements were negotiated between
the Company and the Vendors at arms' length and arrived at on a willing
buyer-willing seller basis, taking into account, amongst other things:
(i) the book value of the Target as at 30 November 2024, along with
the historical financial performance and growth potential of the Target and
its subsidiaries, noting that the Target delivered an EBITDA of approximately
S$3.6 million and EBIT of approximately S$3.2 million for FY2023, being its
latest audited consolidated financial statements(( 20 ));
(ii) the fair value of the Target as set out in the
Valuation Report (as defined below);
(iii) the outcome of the legal, financial and tax due
diligence conducted by the Group on the Target and its subsidiaries; and
(iv) the prevailing market conditions in respect of the art
outsourcing and game development industries globally. For further details,
please refer to the section entitled "Market and Regulatory Overview" of the
AIM Admission Document released by the Company on SGXNet on 11 November 2024
("AIM Admission Document").
(d) Conditions Precedent to the Proposed Acquisition
Completion of the Proposed Acquisition is conditional upon satisfaction of the
conditions precedent set out in the Equity Purchase Agreements, which include,
inter alia, the following:
(i) The issued share capital of the Target and its
subsidiaries having been fully paid up;
(ii) The shareholders of the Target having passed a
resolution to approve the Proposed Acquisition;
(iii) The Vendors having executed confidentiality and non-competition
agreements and intellectual property ownership agreements to the satisfaction
of the Purchaser;
(iv) All shareholders of the Target having waived their
rights of first refusal in relation to the transfers of equity interests under
the Proposed Acquisition;
(v) The Vendors notifying the relevant customers of the
Target Group of the Proposed Acquisition and providing the notification
documents to the Purchaser;
(vi) The Purchaser having been registered as the sole shareholder
of the Target with the local companies registry;
(vii) The changes in the board members, legal representative,
supervisor(s) and management personnel of the Target, as specified by the
Purchaser, having been completed;
(viii) As at the Completion Date, the representations and
warranties made by the Vendors and the Target being true and accurate;
(ix) As at the Completion Date, no event has occurred which has a
material adverse effect on the financial condition, operating results,
business operations or assets of the Target;
(x) As at the Completion Date, there are no court judgments,
government agency rulings or legal provisions that (a) restrict, prohibit,
delay or otherwise prevent or seek to prevent the completion of the Proposed
Acquisition; (b) cause the Target, the Vendors and/or the Purchaser to suffer
fundamental major penalties or bear major legal liabilities; or (c) restrict
the operations of the Target and thereby constitute a major adverse change;
and
(xi) Such other standard administrative prerequisites for
the payment of the Purchase Consideration,
(collectively, the "Conditions Precedent").
Completion shall take place as the parties to the Equity Purchase Agreements
may agree.
The allotment and issuance of the Incentive Shares shall only take effect
after completion of the Proposed Acquisition and after approval of the
Directors for the allotment and issuance of the Incentive Shares has been
obtained.
(e) Value of the Equity Interest in the Target
Based on the latest unaudited accounts of the Target as at 30 November 2024,
the book value of the Target's assets were RMB60,040,019 (or approximately
S$11.2 million(( 21 )) or US$8.19 million(( 22 )) or £6.71 million 23 ) and
the net tangible asset value of the Target as at 30 November 2024 was
RMB54,834,473 (or approximately S$10.2 million(( 24 )) or US$7.48
million(( 25 )) or £6.13 million(( 26 ))). There is no open market value for
the equity interest in the Target.
The Purchaser had commissioned an independent valuation in respect of 100% of
the equity interest of the Target for the purposes of the Proposed
Acquisition. Based on a valuation report dated 6 January 2025 prepared by
ClientView Management Consulting Co., Ltd.
(客观企业管理顾问股份有限公司) (the "Valuation Report"), the
fair value of 100% of the equity interest of the Target as at 30 November 2024
is a range of RMB143,173,316 (or approximately S$26.7 million (( 27 )) or £16
million 28 ) to RMB152,312,084 (or approximately S$28.41 million (( 29 )) or
£17.03 million 30 ) (the "Fair Value of the Target"). The Fair Value of the
Target was mainly derived from the income method of valuation, which is based
on the future income flow, including expected dividends, cash flows or
surpluses.
4. RATIONALE FOR AND BENEFITS OF THE PROPOSED ACQUISITION AND INCENTIVE
ARRANGEMENTS
The Directors believe that the Proposed Acquisition is in line with the
Group's business strategy to pursue strategic acquisitions to increase its
revenue and expand its capabilities so as to increase its market presence
globally, which is in line with its business strategies as disclosed in the
section entitled "General Information on our Group - Business Strategies and
Future Plans" of the offer document issued by the Company dated 8 November
2023 (the "Offer Document"), in the Company's annual report for FY2023, and in
the Company's circular to its Shareholders dated 15 April 2024 (the "Placement
Circular").
In addition, the Directors believe that the Proposed Acquisition will allow
the Group to scale up its presence across different market segments within the
global gaming services industry, which is in line with the Company's business
strategies of pursuing growth through acquisitions.
Together with the addition of the Target's team of more than 460 employees to
the Group's team of more than 800 employees, the Proposed Acquisition is also
expected to provide the Group with increased resources, including assets and
know-how, so as to achieve an overall increased capacity for its service
offerings. The Target's established experience and presence in the Japanese
market is also a notable value add to the Group's business networks.
The Proposed Acquisition is expected to expand the pool of clients for both
the Target and the Group, hence there are also opportunities for increased
business synergies and cross-selling, driving enhanced economies of scale and
scalability.
The Proposed Acquisition will also enable the Group to capitalise on the
Target's strength in console platform games, which is a good complement to the
Group's capabilities in online platform games, enhancing its value
propositions across the value chain of the global gaming services industry to
deliver cost-effective solutions for its Western and Asian gaming clients in
different market segments.
The Incentive Arrangements serve as a means to incentivise the Key Management
Personnel to, inter alia, achieve the performance targets set out in the
Incentive Agreements, remain in the Target Group and to further the growth of
the Target Group.
The Proposed Acquisition and the Incentive Arrangements will be financed
through the Company's internal resources, which include proceeds from the
Placement (as defined in the Offer Document) and the Cornerstone Tranche (as
defined in the Offer Document) and the Placement Net Proceeds (as defined in
the Placement Circular). Further details on the utilisation of the proceeds
raised from the Placement and the Cornerstone Tranche as well as the Placement
Net Proceeds are set out in section 7 of this Announcement below.
Having considered the terms of the Proposed Acquisition and the Incentive
Arrangements and the benefits of the Proposed Acquisition and the Incentive
Arrangements to the Group, the Directors are of the view that the Proposed
Acquisition and the Incentive Arrangements are in the best interests of the
Company.
5. FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION AND THE
INCENTIVE ARRANGEMENTS
The proforma financial effects are presented purely for illustrative purposes
only and are therefore not necessarily indicative of the actual financial
performance or position of the Group after completion of the Proposed
Acquisition and the Incentive Arrangements.
The proforma financial effects of the Proposed Acquisition and the Incentive
Arrangements on the net tangible assets ("NTA") attributable to the owners of
the Company per Share and the earnings per share ("EPS"), and gearing of the
Group are set out below. The proforma financial effects have been prepared
based on the latest audited consolidated financial statements of the Group as
at 31 December 2023, and on the following key bases and assumptions:
(i) the financial effects of the Proposed Acquisition
and the Incentive Arrangements on the NTA per Share of the Company for FY2023
are computed assuming that the Company's placement exercise of S$27.0 million
and dual listing placing exercise of S$13.5 million (collectively, the "2024
Placement Exercises") had been completed on 31 December 2023;
(ii) the financial effects of the Proposed Acquisition and
the Incentive Arrangements on the EPS of the Company for FY2023 are computed
assuming that the 2024 Placement Exercises had been completed on 1 January
2023; and
(iii) the computation does not take into account any
expenses that may be incurred in relation to the Proposed Acquisition and the
Incentive Arrangements.
It is noted that the financial results of Mineloader for FY2023 is audited
based PRC GAAP. As such, this may be subject to adjustments based on IFRS
which is currently adopted by the Company.
(a) Effect on NTA per Share
For illustrative purposes only, the proforma financial effects of the Proposed
Acquisition and the Incentive Arrangements on the Group's NTA per Share,
assuming that the Proposed Acquisition and the Incentive Arrangements had been
completed on 31 December 2023, being the end of the most recently audited and
completed financial year, are set out below:
As at 31 December 2023 After the 2024 Placement Exercises, but before the completion of the Proposed After the 2024 Placement Exercises, and the completion of the Proposed
Acquisition and the Incentive Arrangements* Acquisition and the Incentive Arrangements
NTA (US$'000) 18,699 47,995((1)) 53,570((3))
Number of issued Shares (excluding treasury shares) ('000) 279,698 440,365((2)) 456,725((4))
NTA per Share (US cents) 0.07 0.11 0.12
Notes:
(1) The NTA of the Group is computed based on the net
assets (after deducting intangible assets and rights-of-use assets) of the
Group as at 31 December 2023 and the increase in NTA as a result of the 2024
Placement Exercises.
(2) Based on the total number of issued Shares of the
Company as at 31 December 2023 and the increase in the total number of issued
Shares as a result of the 2024 Placement Exercises.
(3) The NTA after the Proposed Acquisition and the
Incentive Arrangements is computed by aggregating the NTA of the Target Group
with the Company's NTA as at 31 December 2023.
(4) Based on the total number of issued Shares of the
Company as at 31 December 2023 and the increase in total number of issued
Shares as a result of the 2024 Placement Exercises and assuming that the full
issuance of all the Incentive Shares at the Illustrative Issue Price of
S$0.2735 (or approximately RMB1.4665(( 31 (#_ftn31) )) or £0.1640(( 32
(#_ftn32) ))) per Incentive Share.
*This column merely includes the number of issued Shares and the funds raised
from the 2024 Placement Exercises (where applicable).
(b) Effect on EPS
For illustrative purposes only, the proforma financial effects of the Proposed
Acquisition and the Incentive Arrangements on the consolidated earnings of the
Group, assuming that the Proposed Acquisition and the Incentive Arrangements
had been completed on 1 January 2023, being the beginning of the most recently
audited and completed financial year, are set out below:
As at 31 December 2023 After the 2024 Placement Exercises, but before the completion of the Proposed After the 2024 Placement Exercises, and the completion of the Proposed
Acquisition and the Incentive Arrangements* Acquisition and the Incentive Arrangements
Net profits((1)) (US$'000) 1,780 1,780 4,067((3))
Weighted average number of Shares ('000) 243,881((2)) 404,048((2)) 448,657((4))
EPS (US cents) 0.73 0.44 0.91
Notes:
(1) Net profit means profit attributable to owners of the
parent.
(2) The weighted average number of ordinary Shares for
FY2023 of 243,381,211 and adjusted for the increase in the number of ordinary
Shares to 404,047,878 assuming the completion of the 2024 Placement Exercises.
(3) The net profits after the Proposed Acquisition and the
Incentive Arrangements is computed by aggregating the net profit of the Target
Group of approximately US$2.3 million for FY2023 with the Company's net profit
for FY2023.
(4) The weighted average number of ordinary Shares for
FY2023 of 243,381,211 and adjusted for the increase in the number of ordinary
Shares to 404,047,878 as a result of the 2024 Placement Exercises and assuming
the full issuance of all the Incentive Shares at the Illustrative Issue Price
of S$0.2735 (or approximately RMB1.4665(( 33 (#_ftn33) )) or £0.1640(( 34
(#_ftn34) ))) per Incentive Share.
*This column merely includes the number of issued Shares and the funds raised
from the 2024 Placement Exercises (where applicable).
(c) Effect on share capital of the Company
The effect of the Proposed Acquisition and the Incentive Arrangements on the
issued and paid-up share capital of the Company is set out below:
As at 31 December 2023 Before the completion of the Proposed Acquisition and the Incentive After the completion of the Proposed Acquisition and the Incentive
Arrangements Arrangements((1))
Issued and paid-up share capital S$11,187,931 S$17,614,598 represented by 440,364,942 Shares S$18,269,011.12((2)) represented by 456,725,278 Shares
represented by 279,698,275 Shares
Notes:
(1) Assuming the issuance of 16,360,336 Incentive Shares,
at the Illustrative Issue Price of S$0.2735 (or approximately
RMB1.4665(( 35 )) or £0.1640(( 36 ))) per Incentive Share, being the weighted
average price for trades done on the SGX-ST for the preceding market day up to
the time the Incentive Agreements were signed.
(2) This figure is calculated by adding the existing
440,364,942 Shares in the capital of the Company to 16,360,336 Incentive
Shares, assuming the full issuance of 16,360,336 Incentive Shares at the
Illustrative Issue Price of S$0.2735 (or approximately RMB1.4665(( 37 )) or
£0.1640(( 38 ))) per Incentive Share, and multiplying the result by S$0.04,
being the par value of each Share.
(d) Gearing
The Proposed Acquisition and Incentive Arrangements will not have any impact
on the gearing ratio on the Group as the Target Group has no gearing following
the full repayment of all of its borrowings as at 30 November 2024.
6. RELATIVE FIGURES IN RESPECT OF THE PROPOSED ACQUISITION AND
THE INCENTIVE ARRANGEMENTS
The relative figures in respect of the Proposed Acquisition and the Incentive
Arrangements pursuant to Rule 1006 of the Catalist Rules based on the latest
announced consolidated financial statements of the Group as at 30 June 2024
are as follows:
Catalist Rule Bases of computation Relative figures (%)
1006(a) The net asset value ("NAV") of the assets to be disposed of, compared with the Not applicable((1))
Group's NAV
1006(b) The net profits attributable to the assets acquired or disposed of, compared 53.40((2))
with the Group's net profits
1006(c) The aggregate value of the consideration given or received, compared with the 23.70((4))
Company's market capitalisation((3)) based on the total number of issued
Shares excluding treasury shares
1006(d) The number of equity securities issued by the Company under the Incentive 3.72((5))
Arrangements, compared with the number of equity securities previously in
issue ( )
For the avoidance of doubt, the Incentive Shares to be issued under the
Incentive Arrangements do not form part of the consideration payable for the
Proposed Acquisition.
1006(e) The aggregate volume or amount of proved and probable reserves to be disposed Not applicable((6))
of, compared with the aggregate of the Group's proved and probable reserves.
This basis is applicable to a disposal of mineral, oil and gas assets by a
mineral, oil and gas company, but not to an acquisition of such assets.
Notes:
(1) This basis is not applicable to the Proposed Acquisition and
the Incentive Arrangements, which are not a disposal.
(2) Under Catalist Rule 1002(3)(b), "net profits" means profit
or loss including discontinued operations that have not been disposed and
before income tax and non-controlling interests. Based on the latest announced
consolidated financial statements of the Group for the 6-month period ended 30
June 2024, the net profits of the Group were approximately US$1,007,000 (or
approximately RMB7.39 million(( 39 )) or S$1.38 million(( 40 )) or £0.8
million(( 41 ))). Based on the latest unaudited financial statements of the
Target for the same financial period, the net profits attributable to the
Target were approximately RMB3,942,197 (or approximately US$0.73 million 42
or £0.44 million(( 43 ))).
(3) Under Catalist Rule 1002(5), "market capitalisation" is
determined by multiplying the number of issued Shares by the volume weighted
average price of such Shares transacted on 16 January 2025, being the last
market day whereby the Shares were traded preceding the date of the Equity
Purchase Agreements.
(4) The aggregate value of the consideration and the value of
the Incentive Shares (based on the Illustrative Issue Price of S$0.2735 (or
approximately RMB1.4665(( 44 )) or £0.1640(( 45 ))) per Incentive Share)
which may be payable by the Company to the Vendors is RMB170 million (or
approximately S$31.7 million(( 46 )) or £19 million(( 47 ))) while the market
capitalisation of the Company is approximately S$133,782,869, which was
determined by multiplying the number of Shares of 440,364,942 by the weighted
average price of such Shares transacted on 16 January 2025 (being the market
day preceding the date of the Equity Purchase Agreements) of S$0.3038 per
Share.
(5) The number of Shares refers to the 16,360,336 Incentive Shares to be
issued amounting to a value of RMB23,992,100 (or approximately S$4.5
million(( 48 )) or £2.7 million(( 49 ))) in aggregate based on the
Illustrative Issue Price of S$0.2735(( 50 )). Computed based on the issued
Shares of the Company of 440,364,942 Shares as at 16 January 2025 (being the
market day preceding the date of the Incentive Agreements).
(6) This basis is not applicable as the Company is not a
mineral, oil and gas company.
For the avoidance of doubt, the Proposed Acquisition itself is undertaken in
the ordinary course of business of the Company and is therefore not subject to
the requirements under Chapter 10 of the Catalist Rules. However, as the
Incentive Arrangements arise in connection with the Proposed Acquisition and
will only come into effect following completion of the Proposed Acquisition,
the value of the Proposed Acquisition is aggregated with the Incentive
Arrangements for the purposes of presenting the relative figures under Rule
1006 of the Catalist Rules. On this basis, the relative figures under Rule
1006(b) and Rule 1006(c) of the Catalist Rules exceed 5% but are less than
75%.
7. USE OF PROCEEDS RAISED FROM PREVIOUS FUNDRAISING EXERCISES
(a) The Board also wishes to provide an update on the use
of proceeds raised from the Placement (as defined in the Offer Document) and
the Cornerstone Tranche (as defined in the Offer Document), the Proposed
Placement (as defined in the Placement Circular) and the Placing (as defined
in the AIM Admission Document) (collectively, the "Previous Fundraising
Exercises").
(b) As at the date of this Announcement, approximately
S$41,725,000 (or approximately £25.01 million 51 ) out of the gross proceeds
of approximately S$23,821,040 (or approximately £14.28 million 52 ) raised
from the Previous Fundraising Exercises have been utilised. Details of the use
of the proceeds from the Previous Fundraising Exercises as at the date of this
Announcement are as follows:
Placement and the Cornerstone Tranche (as defined in the Offer Document)
Allocation Amount utilised Balance
(S$'000) (S$'000) (S$'000)
Expansion of the Group's operations globally, including establishing 1,000 1,000 0
subsidiaries and offices and enhancing existing office and supporting
infrastructure
Acquisitions, joint ventures and/or strategic alliances 2,240 2,240 0
Exploration of the use of AI capabilities in the Group's art outsourcing 1,200 1,070 130
segment
General working capital purposes 636 636 0
Total 5,076 4,946 130
Proposed Placement (as defined in the Placement Circular)
Allocation Amount utilised Balance
(S$,000) (S$,000) (S$,000)
Corporate actions such as secondary or dual listings of the Company, potential 17,200 17,200 0
fundraising exercises, pursuing strategic acquisitions, alliances and joint
ventures to grow the Group's market share and broaden the Group's customer
base
Enhancement of the Group's current operational capabilities, which include 4,000 0 4,000
continuous exploration of the use of AI capabilities
Expansion and improvements to the Group's regional offices and supporting 2,700 213 2,487
infrastructure as the Group continues to increase its market presence globally
Professional and other related fees to be incurred in relation to potential 1,300 1,300 0
corporate exercises such as fundraising exercises, listings, strategic
acquisitions, alliances and joint ventures
General working capital requirements of the Group 1,300 162 1,138
Total 26,500 18,875 7,625
Placing (as defined in the AIM Admission Document)
Allocation Amount utilised Balance
(S$,000) (S$,000) (S$,000)
To continue actively pursuing strategic acquisitions, alliances and joint 9,537 0 9,537
ventures in Asia and Europe to grow the Group's market share and increase
operational capacity
To establish a stronger presence and broaden the Group's customer base in the 306 0 306
North American and European markets, including (i) increasing the Group's
marketing and business development efforts; (ii) establishing a UK-based
regional hub; and (iii) pursuing acquisitions of smaller studios in this
region
Enhancement of the Group's current operational capabilities, which include 306 0 306
continuous development and improvement of the Group's AI capabilities
Total 10,149 0 10,149
The utilisations of the proceeds are in line with the intended uses and
allocations as set out in the Offer Document, Placement Circular and AIM
Admission Document respectively.
8. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS
None of the Directors or substantial shareholders of the Company has any
interest, whether direct or indirect, in the Proposed Acquisition and/or the
Incentive Arrangements, save for their direct or indirect interests (if any)
arising by way of their shareholdings and/or directorships, as the case may
be, in the Company.
9. DETAILS OF SERVICE CONTRACTS
No person will be appointed to the Board, and no service contract will be
entered into by the Company in connection with the Proposed Acquisition and/or
the Incentive Arrangements.
10. DOCUMENTS FOR INSPECTION
Copies of the Equity Purchase Agreements, Incentive Agreements and the
Valuation Report are available for inspection during normal business hours at
the Singapore headquarters of the Company at 6 Raffles Quay, #14-06, Singapore
048580, for a period of 3 months commencing from the date of this
Announcement.
11. FURTHER UPDATES
The Company will make the relevant update announcements in compliance with the
Catalist Rules and the AIM Rules for Companies to inform Shareholders of any
updates or developments in due course in relation to the Proposed Acquisition
and/or the Incentive Arrangements, if any.
12. CAUTION IN TRADING
Shareholders and potential investors of the Company should exercise caution
when trading in the Shares. In particular, Shareholders and potential
investors of the Company should note that there is no assurance that the
Proposed Acquisition and/or the Incentive Arrangements will complete or
materialise. Persons who are in doubt as to the action they should take should
consult their legal, financial, tax or other professional advisers.
BY ORDER OF THE BOARD
MR. JOHNNY JAN
Executive Director and Chief Executive Officer (Founder)
17 January 2025
Winking Studios Limited (the "Company") was listed on Catalist of the
Singapore Exchange Securities Trading Limited (the "Exchange") on 20 November
2023. The initial public offering of the Company was sponsored by
PrimePartners Corporate Finance Pte. Ltd. (the "Sponsor"). This Announcement
has been reviewed by the Sponsor. It has not been examined or approved by the
Exchange and the Exchange assumes no responsibility for the contents of this
Announcement, including the correctness of any of the statements or opinions
made or reports contained in this Announcement. The contact person for the
Sponsor is Ms. Foo Jien Jieng, 16 Collyer Quay, #10-00 Collyer Quay Centre,
Singapore 049318, sponsorship@ppcf.com.sg.
The information contained within this Announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.
1 The financial results of Mineloader for FY2023 is audited based on
China generally accepted accounting principles ("PRC GAAP"). As such, this
may be subject to adjustments based on International Financial Reporting
Standards ("IFRS") which is currently adopted by the Company.
2 Based on the exchange rate of RMB1:S$0.1865 as at 16 January 2025 as
extracted from the Monetary Authority of Singapore's ("MAS") website.
3 Based on the exchange rate of RMB1: £0.1118 as at 16 January 2025 as
extracted from the MAS website.
4 The unified social credit code serves as a legal entity's unique
identification number in the PRC.
5 See footnote 2.
6 See footnote 3.
7 See footnote 2.
8 See footnote 3.
9 See footnote 2.
10 See footnote 3.
11 See footnote 2.
12 See footnote 3.
13 The weighted average share price for trades on AIM of the London Stock
Exchange as referred to in the Incentive Agreements shall be extracted from
the daily weighted average share price published by the London South East
website at the URL: https://www.lse.co.uk as mutually agreed amongst the
Parties.
14 The exchange rate to be used for the conversion of the weighted average
share price in GBP to RMB shall be based on the midpoint exchange rate of GBP
against RMB on the 5(th) market day from the immediately following market
day after the Announcement Date, as extracted from the China Foreign Exchange
Trading Center at the URL:
https://www.safe.gov.cn/big5/big5/www.safe.gov.cn/safe/rmbhlzjj/index.html
15 The weighted average share price for trades on the Catalist of the SGX-ST
shall be extracted from Bloomberg. The exchange rate to be used for the
conversion of the weighted average share price in SGD to RMB shall be based on
the exchange rate of SGD against RMB on the 5(th) market day from the
immediately following market day after the Announcement Date, as extracted
from the MAS website at the URL:
https://eservices.mas.gov.sg/Statistics/msb/ExchangeRates.aspx
16 See footnote 2.
17 See footnote 3.
18 Based on the exchange rate of S$1: RMB5.3619 as at 16 January 2025 as
extracted from the MAS website.
19 Based on the exchange rate of S$1: £0.5995 as at 16 January 2025 as
extracted from the MAS website.
20 See footnote 1.
21 See footnote 2.
22 Based on the exchange rate of RMB1: US$0.1364 as at 16 January 2025 as
extracted from the MAS website.
23 See footnote 3.
24 See footnote 2.
25 See footnote 22.
26 See footnote 3.
27 See footnote 2.
28 See footnote 3.
29 See footnote 2.
30 See footnote 3.
31 See footnote 18.
32 See footnote 19.
33 See footnote 18.
34 See footnote 19.
35 See footnote 18.
36 See footnote 19.
37 See footnote 18.
38 See footnote 19.
39 Based on the exchange rate of US$1: RMB7.3319 as at 16 January 2025 as
extracted from the MAS website.
40 Based on the exchange rate of US$1: S$1.3674 as at 16 January 2025 as
extracted from the MAS website.
41 Based on the exchange rate of US$1: £0.8197 as at 16 January 2025 as
extracted from the MAS website.
42 See footnote 22.
43 See footnote 3.
44 See footnote 18.
45 See footnote 19.
46 See footnote 2.
47 See footnote 3.
48 See footnote 2.
49 See footnote 3.
50 Based on Illustrative Issue Price for each Incentive Share of S$0.2735
(or approximately RMB1.4665 or £0.1640), which is at not more than 10%
discount to the weighted average price for trades done on the SGX-ST on the
preceding market day up to the time the Incentive Agreements are signed based
on the basis of the Lower Limit Issue Price as set out in section 3(b)(ii) of
this Announcement. The actual issue price of the Incentive Shares may be
higher.
51 See footnote 19.
52 See footnote 19.
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