Power Products Maker Tricklestar Files Prospectus To List On SGX Catalist Board

Tricklestar Limited (Tricklestar), an energy-saving power products manufacturer, has filed a preliminary prospectus to list on the Singapore Exchange (SGX) Catalist Board.

The pricing, amount to be raised, and timing of the offering have not yet been announced.

Tricklestar is primarily in the business of designing and supplying energy saving products and solutions to help consumers reduce energy consumption in their homes and workplaces. Their portfolio of products include advanced powerstrips, load controllers, energy meters, energy monitors, and surge protectors. Their customers include electric utilities, energy efficiency programs, implementation contractors, and energy auditors in the United States.

Tricklestar, headquartered in Malaysia, has its sales office and main warehouse facilities located in the United States. Besides, it currently outsources manufacturing to an independent Taiwanese contract manufacturer based in China.

In its most recent financial statements for the year ending December 31, 2018, the company posts total revenues of approximately $12.84 million, up 24.4 per cent from the previous year in 2017. Total profits for the financial year (FY) 2018 nearly tripled from $0.65 million in FY 2017 to $1.97 million in FY 2018. Earlier, the company has suffered a loss of minus $0.26 million in FY 2016.

Tricklestar’s total cash and bank balances as of December 31, 2018 stood at $1.55 million, up from $1.49 million in the previous year. The company did not incur any significant interest-bearing debt on the books since FY 2016.

To date, the issued and paid-up capital of $6.2 million for Tricklestar comprised of 66.8 million shares, which will be increased following the completion of the initial public offering (IPO).

Trickletar is also committed to a dividend payout ratio of not less than 50 per cent of the group’s consolidated net profit after tax, excluding minority interests, and other non-recurring items, whether as an annual dividend or an interim dividend.

However, the dividend payout commitment is not legally binding and there is no assurance that dividends will be declared or paid in the future.

The major shareholder is CircleBright Limited (CircleBright) which currently holds 41.62 million shares or 62.3 per cent stake in Tricklestar. According to a website, CircleBright is a private equity (PE) firm which invests in innovative, early to established energy efficiency, demand response, clean energy type of companies looking to expand internationally. The PE firm is headed by N. Gunananthan, the firm’s CEO, followed by Bernard Emby, a director of the firm. Another executive, Jern Ern Chuah is CircleBright’s Chief Intellectual Property Advisor to the Board.

There are also two executives at CircleBright holding directorships in Tricklestar. Bernard Emby holds 6.66 million shares or 10 per cent direct stake, and 41.62 million shares (62.3 per cent) deemed stake in Tricklestar, while N. Gunanantham holds a similar 41.62 million shares (62.3 per cent) deemed stake in Tricklestar. An independent director by the name of Ling Hee Keat holds 1.52 million shares or 2.3 per cent deemed stake in the company.

Upon listing, the company plans to use the proceeds from the IPO to scale the firm’s presence in markets it is operating in, expanding to new geographical markets and establishing new sales channels. It will also use the proceeds for product development; mergers and acquisitions (M&A); and general working capital purposes.

The key risks include heavy dependence on certain key staff members like Emby and Guananantham whose combined expertise in the energy efficiency industry are almost irreplaceable. Moreover, the company is heavily reliant on independent contract manufacturers, limited suppliers, and professional staff to create and design products.