• Goodwill Entertainment operates multi-entertainment concepts, comprising a network of family-friendly karaoke facilities with F&B concepts, performance halls and dance clubs. The company operates under the brand names “HaveFun Family Karaoke”, “FATEbyhavefun” and “HaveFun Live Show”. 
   
• Goodwill Entertainment currently operates 12 outlets in Singapore, consisting of 11 karaoke outlets and 1 mega live entertainment house. The Group’s plans include geographical expansion across the SEA region and expanding into new verticals that are complementary to its current services. 
   
• The Group does not have a fixed dividend policy, but its Directors intend to recommend and distribute dividends of up to 30% of the Group’s net profit after tax attributable to equity holders of the company in respect to FY2024 and FY2025.
   

Goodwill Entertainment’s business focuses on multi-entertainment venues and concerts. The business comprises of a network of family-friendly karaoke facilities with F&B concepts, performance halls and dance clubs, operating under the brand names “HaveFun Family Karaoke”, “FATEbyhavefun” and “HaveFun Live Show”.

The Group’s plans include geographical expansion across the SEA region with an initial focus on Malaysia, and vertical expansion to enhance revenue opportunities through in-house beverage production and developing a food manufacturing plant.

Goodwill Entertainment has raised S$12 million in gross proceeds from its placement of 60 million shares, giving it an initial market capitalisation of S$80 million. The Group has two main business segments:

1. Karaoke Lounges & Multi-Entertainment Venues (74.0% of 3M2024 revenue) – Operates 11 “HaveFun Family Karaoke” outlets across Singapore, providing customers with amenities such as private cinemas, pool tables, dart machines, board and console games. Some outlets also feature performance halls that serve as event spaces. 
2. Live Show Concept (26% of 3M2024 revenue) – Comprises of the Group’s latest instalment “HaveFun Live Show”, a first-of-its-kind mega live entertainment house in Singapore providing up close live performances and interactions with various performing artistes.

Entertainment Services Industry Outlook & Prospects from the Offer Document

• Growing domestic consumption in Singapore
• Population growth and increasing household income are factors driving domestic consumption.
• Singapore’s population has been steadily growing at a five-year CAGR of 1.0%, from 5.64 million in 2018 to approximately 5.92 million in 2023.
• Average monthly household income has also increased from S$10,099 in 2022 to S$10,869 in 2023. With growing affluence, the Group believes that demand for afterhours entertainment and retail food services is expected to continue.
• Regional opportunities for growth
• Between 2023 and 2028, ASEAN’s projected average annual GDP growth is 4.4%, making it the second fastest growing economy after India. ASEAN’s middle class is projected to grow from 190 million residents in 2020 to over 334 million by 2030.
• With consumerism on the rise, Singapore’s entertainment and F&B industry players could stand to benefit by tapping into opportunities in the rest of Asia.

Highlights from the Offer Document

Competitive Strengths

• Outlets are positioned in easily accessible locations to enhance visibility and allow proximity to target consumers, strengthening connection with intended market segments.
• Established business relationships with karaoke equipment suppliers allows for timely resolution of technical issues to avoid unnecessary interruptions in business operations. The Group also has agreements with alcohol brand owners, which gives certain incentive rebates for alcohol purchases upon fulfilling a certain order volume.
• Ability to expand offerings with strategic partners such as the launch of “HaveFun Live Show” at the Bugis+ Joint Venture Outlet in collaboration with Hezong group -- an experienced player in lifestyle and multi-entertainment events.
• Keeping up with latest technology to complement offerings, such as a mobile technology strategy to facilitate in-room music selection process for customers, and upcoming plans to introduce a new booking system to enhance user convenience and staff productivity. 

Business Strategies & Future Plans

• Continued Growth & Geographical Expansion
• Open more outlets and introduce newer concepts as part of pursuing strategic growth and expansion within Singapore. 
• Open new outlets in major cities in SEA with an initial focus on expanding operations to Malaysia and expanding brand presence to other countries in the region.
• Broaden Service Offerings by Vertical Expansion 
• Develop house craft beers to supply outlets, reducing reliance on third-party suppliers for alcoholic beverages and expand on capabilities to diversify the business.
• Develop a food manufacturing plant to produce a range of food products tailored to the specific needs of its outlets. The Group has entered into the sale and purchase agreements of 2 units in a multi-tenanted ramp-up factory development designed for food-related trades.
• Strategic Joint Ventures and Alliances
• Actively pursue joint ventures and strategic alliances to create synergies with existing businesses. 
• The Group’s has collaborated with Hezong group, an established multi-media and lifestyle brand, for the “HaveFun Live Show” concept at Bugis+.
• Further Investments in Technology
• Invest in AI to create immersive entertainment and audience engagement.
• Develop an advanced AI robot system to enhance productivity and elevate customer experience in “HaveFun Family Karaoke” for convenience in reservations, tracking of membership and past transactions, accumulation of membership points and redemption thereof. 
• Pioneer a feature that allows customers to create personalized music videos and utilise their unique music videos for future visits.

Key Risk Factors 
(Refer to page 40 of the Offer Document for a complete list of risk factors)

• Given the sensitivity of the Group’s business to economic and social conditions, declines in general economic conditions could reduce the level of discretionary income and significant shift in consumer spending, preference and lifestyle trends.
• Operating in a highly competitive industry with low barriers to entry for new karaoke operators, the Group may not be able to compete effectively against well-established competitors with significantly greater reputation and resources. New entrants or existing competitors may also present increased competition because of lower prices or other marketing strategies. 
• As all outlets operate on properties leased from third parties, landlords may revise the terms and conditions during the renewal negotiations and the Group faces the possibility of rent increment and termination of leases. 
• The Group faces uncertainties associated with its overseas expansion plans, such as the ability to secure good locations, obtain relevant licences and permits and financial cost of setting up new outlets and working capital requirements. There is no assurance that its expansion plans will achieve sales commensurate with investment costs. 

Financials

• Revenue in FY2021 was comparatively low due to the outbreak of COVID-19 when non-essential activities and entertainment venues were restricted, leading to lower EBITDA and a net loss attributable to owners of the company of -S$3.3 million in FY2021. 
• Revenue increased by 1,672.8% from S$0.9 million in FY2021 to S$16.5 million in FY2022, attributed to the resumption of operations after Circuit Breaker Measures were gradually lifted and the opening of 2 new outlets in FY2022 which expanded business operations to 9 outlets.
• Revenue increased by 45.1% from FY2022 to FY2023, primarily due to continuing full-year operations of all existing karaoke outlets and the opening of 2 new outlets in FY2023. 

• Based on the placement price of S$0.20 and the 0.73 cent audited earnings per share (EPS) of the Group for FY2023 post-placement, the price-to-earnings ratio is 27.4 times.
• The Group does not have a fixed dividend policy but its Directors intend to recommend and distribute dividends of up to 30% of the Group’s net profit after tax attributable to equity holders of the company in respect to FY2024 and FY2025, subject to certain factors.

Entertainment-related Plays on the SGX

After the listing of Goodwill Entertainment, SGX now lists 7 Entertainment-related players that operate mainly in the events, concerts, and entertainment production space.  These counters have a total market capitalisation of around S$440 million. Sorted by market capitalisation, the companies are:

Source: SGX, Refinitiv, Bloomberg (Data as of 14 November 2024).

• GHY Culture & Media engages in production and distribution of films and dramas and presentation of live entertainment.
• UnUsUal specialises in the production and promotion of large-scale live events and concerts by Asian and International artistes. 
• Goodwill Entertainment operates multi-entertainment concepts, comprising a network of family-friendly karaoke facilities with F&B concepts, performance halls and dance clubs.
• MM2 Asia has businesses in the production and distribution of film, TV and online content, post-production, cinema operation, event production and concert promotion.  
• Noontalk Media specialises in Chinese media entertainment.  The Singapore-based home-grown media entertainment company specialises in artiste and talent management, multimedia production and event conceptualization.   

Additional Information from the Offer Document

Shareholding Information

Post-invitation and assuming all outstanding options have been exercised:

• 28.38% held by Executive Chairman and CEO Flint Lu (Direct Interest)
• 35.67% held by GIH2023
• 18.77% held by Mengkim
• 1.07% held by Liu Baofeng
• 0.92% held by Wang Guangwu
• 0.19% held by ECA
• 15.00% held by Public Shareholders

IPO Details

• Issue Price at S$0.20
• IPO Market Capitalisation S$80.0 million
• Total of 60.0 million placement shares comprising 42.5 million New Shares and 17.5 million Vendor Shares
• Use of IPO net proceeds of S$6.45 million:
  • S$1.61 million – Expansion of the business regionally and globally
  • S$1.61 million – Broadening existing business verticals
  • S$1.29 million – Acquisitions, joint ventures and/or strategic partnerships
  • S$0.65 million – Investment into entertainment technologies
  • S$1.29 million – General working capital requirements

Did you know?

Goodwill Entertainment’s “HaveFun Live Show” is the first-of-its-kind mega live entertainment house in Singapore providing up close live performances and interactions with various performing artistes, coupled with a T-shaped stage surrounded by over 8,000 lights and state-of-the-art audio-visual equipment, giving a full sensory experience to patrons and delivering a cinematic and immersive concert-like experience. Marketed as a premium leisure concept, the target demographic of “HaveFun Live Show” is adults and white-collar workers between the ages of 30 to 55.

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