IPO of Starbox Group: Rebate Business from Malaysia
4 minutes for reading
Retail companies often use a variety of different loyalty programmes to attract new customers, for example, rebates, bonuses, and discounts. Rebate services, which imply an offer for a cash return on the purchase of consumer goods or services, have recently become extremely popular.
Today, we’ll give you a detailed description of Starbox Group Holdings, a company with a business based on rebates, payment solutions, and digital advertising. On 23 August, the company went public on the NASDAQ under the "STBX" ticker symbol.
What we know about Starbox Group Holdings
Starbox Group Holdings Ltd. Is a Malaysian fintech company that is engaged in providing rebate, payment, and digital advertising services. The issuer’s target audience includes small and medium-sized businesses that don’t have their own in-house marketing services to promote goods and products.
Starbox Group Holdings is run by its CEO, Lee Choon Wooi. His tenure with the company started in January 2020. Earlier, he served as an executive director at Teclutions Sdn. Bhd., which develops software for eCommerce and multi-level marketing.
Starbox Group Holdings’ main business areas:
- Website/mobile application of the GETBATS rebate platform
- Website/mobile application of the SEEBATS media service
- Digital advertising solutions
- Payment gateways
From October 2021 through March 2022, the number of merchants and customers registered in the GETBATS platform increased by 10.5% and 19.3%, to 799 and 613,509, respectively, while the total number of transactions they performed on the website and in the mobile application was 188,718.
Starbox Group Holdings’s revenue in the semester that ended on 31 March 2022 was distributed as follows: digital advertising – 99.6%, payment solutions and rebates – 0.2% each.
As of 30 September 2021, Starbox Group Holdings raised $995,000 in investment. Its major investors were CC Growth Edge Sdn. Bhd., WJG Group Holding Ltd., EVL Corporation Limited, Liu Marketing Sdn. Bhd., and ZYZ Group Holdings Limited.
The prospects of Starbox Group Holdings’ target market
Market research by GlobalData says that the eCommerce market in Malaysia might reach $13.8 billion by 2025. Consequently, the Compound Annual Growth Rate (CAGR) could be 18.3% from 2021 to 2025. Frost & Sullivan believe that the same market in South-East Asia might reach $234.5 billion by 2025 with a CAGR equal to 19.9%.
The company is facing fierce competition, as there are over 700 similar companies in South-East Asia.
How Starbox Group Holdings performs financially
The F-1 form containing the 2021 financial performance data provided by Starbox Group Holdings demonstrates impressive growth. The issuer’s revenue skyrocketed 1957.82% to $3.17 million in 2021 compared to 2020, while the net gained $805.64, up to $1.45 million. Such explosive growth in both indicators can be explained by an increase in active users of the company’s products.
Starbox Group Holdings’ cash position in 2021 was positive – $1.9 million. As of 30 September 2021, the issuer’s total liabilities were $2.8 million, while the cash equivalents on its balance sheet were $2.3 million.
Strengths and weaknesses of Starbox Group Holdings
The company's strengths are:
- Prospective target market
- Business scalability and opportunities for international expansion
- Strong business ecosystem
- Proprietary solutions
- High revenue and net profit growth rates
- Highly marginal products
- Qualified management
The list of key weaknesses includes strong competition, limited experience in high-growth sectors, dependence on major clients and partners, unstable operating revenue, and the necessity to increase operating expenses in the future.
What we know about the Starbox Group Holdings IPO
The underwriter of the IPO is Network 1 Financial Securities. The issuer has sold 5 million common shares at the price of $4-5 per share. Gross revenue was $22.5 million, not including conventional options sold by the underwriters. None of the active or potential shareholders showed any interest in acquiring new shares at the IPO price.
As of now, the company’s capitalisation is $89.1 million. The issuer’s Price-to-Sales ratio (P/S ratio) multiplier is quite high: 14.93. it might be difficult to calculate the upside due to the explosive growth in sales.
Buying Starbox Group Holdings shares might be considered an investment with high risks, which is not suitable for all investors.
* – Past performance is not a reliable indicator of future results or future performance.
The material presented and the information contained herein is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law 87(I)/2017 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments.
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