• Initiate with a BUY.
• UNUSUAL LIMITED (SGX:1D1) is an Asian concert promotion and event production leader. It has grown since listing into an entity with FY19 earnings of SGD13.2m (CAGR: +53%).
• Given more entertainment opportunities ahead, this should help grow a conservative FY20F-22F NPAT CAGR of 20%. UnUsUaL's share price has also corrected significantly to a reasonable valuation. Consequently, we initiate coverage on a rare local firm that can still deliver high growth over the next 2-3 years.

UnUsUaL Limited Company Background

• UNUSUAL LIMITED (SGX:1D1) was founded in 1997 by two brothers, Leslie and Johnny Ong.
• Prior to its inception, Johnny was already in the business of trading sound, light & video equipment. Most of his customers were recording and broadcasting companies during that time. Leslie subsequently joined the business and the two brothers began their production venture, incorporating UnUsUaL Productions in 1997. As the brothers’ capabilities and technical expertise widened, the business grew from handing small-scale events into managing large-scale concerts and events, such as the National Day of Singapore.
• The group went on to incorporate UnUsUaL Entertainment in 2003 and started its promotion business. UnUsUaL Development was incorporated in 2005 to offer venue management services, which collaborated with owners and managers to secure venues for the group’s events and concerts in advance.
• UnUsUaL predominantly operates through two business segments – production and promotion. It specialises in producing and promoting large-scale live events and concerts in Singapore and the region.
• The group was listed on the SGX Catalist Board on 10 Apr 2017. As part of the restructuring exercise prior to IPO, mm2 Entertainment Pte Ltd (mm2) acquired 51% of UnUsUaL from the two executive directors, Leslie and Johnny. The shares were held under mm2 subsidiary, UnUsUaL Management. After the IPO placement, UnUsUaL Management held 82.18% of the shareholdings. mm2 subsequently sold 5.39% of its shares to Brunei’s Prince Abdul Qawi and Singapore’s Ron Sim’s R3 Asian Gems fund in Apr 2018.
• As at 19 Jul 2018, UnUsUaL Management holds 76.8% in the firm, while founders Leslie and Johnny hold 12% and 6%.

Production

• UnUsUaL provides support to an artiste’s team or event organisers in the setting up and installation of the concerts/events under this business segment. It has one of the largest technical equipment inventory in Singapore, providing audio, staging, lighting & video designs, and technical solutions.
• Additionally, the group also provides creative solutions to event organisers for the production of a concert and/or event. UnUsUaL provides a wholesome range of services – from the conceptualisation and development of creative input to managing and overseeing the entire setting up of a production.
• Its recent notable projects include the provision of technical solutions for the Sing50 event at the National Stadium and creative input for the 28th SEA Games Carnival at the Singapore Sports Hub in 2015. It is also a partner of the Singapore Grand Prix and annual Chingay Parade.

Promotion

• Under the promotion segment, UnUsUaL oversees the planning and managing of concerts and events. It is also vital that the group builds and maintains good working relationships with the artistes and their teams – this allows the group to secure top-notch artistes and the best concerts/events. Services provided under this segment include coordination work – eg coordinating an artiste’s schedule, and the appointment of relevant third-party service providers and suppliers – as well as venue assessment, ticketing management, and the marketing and promoting of a concert/event.

Source: RHB Invest Research - 17 Sep 2019