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.

Business of Starbox Group Holdings
Business of Starbox Group Holdings

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
Business of Starbox Group Holdings
Business of Starbox Group Holdings

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.

Business of Starbox Group Holdings
Business of Starbox Group Holdings

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 target market of Starbox Group Holdings in Malaysia
The target market of Starbox Group Holdings in Malaysia
The target market of Starbox Group Holdings in South-East Asia
The target market of Starbox Group Holdings in South-East Asia

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.

Financial performance of Starbox Group Holdings
Financial performance of Starbox Group Holdings

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.

Material is prepared by

Vadim has a higher education in finance and economics. He started becoming familiar with financial markets in 2012, and now specialises in analysing IPOs and portfolio investments.