Starbox Group Holdings Aims For $23 Million U.S. IPO

Jun. 17, 2022 12:44 PM ETStarbox Group Holdings Ltd. (STBX)FPX, FPXI, IPO, GTIP, CSD, SPAK, IPOS, FPXE, DSPC


  • Starbox Group Holdings Ltd. has filed proposed terms for a $22.5 million IPO.
  • The Malaysia-based firm provides advertising services and a mobile platform for retailers to better connect with customers.
  • STBX is a tiny company with limited operating history, and the IPO appears priced for perfection.
  • While the IPO may attract day traders seeking volatility in early trading, I'm on Hold for the company over the longer term.
  • Looking for more investing ideas like this one? Get them exclusively at IPO Edge. Learn More »

Supporting her senior mother for paying-stock photo

Erdark/E+ via Getty Images

A Quick Take On Starbox Group Holdings Ltd.

Starbox Group Holdings Ltd. (NASDAQ:STBX) has filed to raise $22.5 million in an IPO of its ordinary shares, according to an F-1 registration statement.

The firm provides a mobile platform for merchants to better connect with potential customers.

While the low nominal price for the IPO may attract volatility-chasing day traders in early trading, I'm on Hold for the IPO.

Starbox Overview

Kuala Lumpur, Malaysia-based Starbox was founded to develop the ability for retailers to provide cash rebate offers through technologies such as its websites and mobile applications.

Management is headed by Chairman and CEO Lee Choon Wooi, who has been with the firm since January 2020 and was previously executive director at Teclutions, a multi-level marketing and e-commerce software company.

The company’s primary offerings include:

  • GETBATS website and mobile app

  • SEEBATS website and mobile app

  • Digital advertising solutions

  • Payment gateway solutions

Starbox has booked fair market value investment of $955,000 in equity and debt as of September 30, 2021, from investors including ZYZ Group Holdings, Liu Marketing, EVL Corporation, WJG Group and CC Growth Edge.

Starbox - Customer Acquisition

Starbox seeks merchants who want to advertise their rebate offerings to potential customers, as well as receive payment services at reduced rates.

The firm collects data from its websites that help it to create a database of consumer spending behaviors that it can then use for its advertiser and merchant offerings.

Marketing and Promotional expenses as a percentage of total revenue have dropped as revenues have increased, as the figures below indicate:

Marketing and Promotional

Expenses vs. Revenue



FYE September 30, 2021


FYE September 30, 2020



The Marketing and Promotional efficiency multiple, defined as how many dollars of additional new revenue are generated by each dollar of Marketing and Promotional spend, was 18.0x in the most recent reporting period. (Source)

Starbox’ Market & Competition

According to a 2021 market research report by GlobalData, the e-commerce market in Malaysia was an estimated $7.1 billion in 2021 and is forecast to reach $13.8 billion by 2025.

This represents a forecast CAGR of 18.3% from 2021 to 2025.

The main drivers for this expected growth are a higher demand for day-to-day items that users want to purchase online, such as food and groceries.

Also, below is a historical and projected future growth trajectory of the Malaysian e-commerce market:

Malaysia E-Commerce Market

Malaysia E-Commerce Market (GlobalData)

Starbox Group's Financial Performance

The company’s recent financial results can be summarized as follows:

  • Growing topline revenue from a tiny base

  • A swing to operating profit

  • Positive cash flow from operations

Below are relevant financial results derived from the firm’s registration statement:

Total Revenue


Total Revenue

% Variance vs. Prior

FYE September 30, 2021



FYE September 30, 2020


Operating Profit (Loss)


Operating Profit (Loss)

Operating Margin

FYE September 30, 2021



FYE September 30, 2020

$ (190,163)


Comprehensive Income (Loss)


Comprehensive Income (Loss)

Net Margin

FYE September 30, 2021

$ 1,428,587


FYE September 30, 2020

$ (205,308)


Cash Flow From Operations


Cash Flow From Operations

FYE September 30, 2021

$ 1,883,895

FYE September 30, 2020

$ (342,348)

(Glossary Of Terms)


As of September 30, 2021, Starbox had $2.3 million in cash and $2.8 million in total liabilities.

Free cash flow during the twelve months ended September 30, 2021, was $1.9 million.

Starbox Group's IPO Details

Starbox intends to raise $22.5 million in gross proceeds from an IPO of its ordinary shares, offering 5 million shares at a proposed midpoint price of $4.50 per share.

No existing shareholders have indicated an interest to purchase shares at the IPO price.

Assuming a successful IPO, the company’s enterprise value at IPO would approximate $181 million, excluding the effects of underwriter over-allotment options.

The float to outstanding shares ratio (excluding underwriter over-allotments) will be approximately 11.1%. A figure under 10% is generally considered a ‘low float’ stock which can be subject to significant price volatility.

Management says it will use the net proceeds from the IPO as follows:

approximately 60% for expanding our business into other countries in Southeast Asia, including [i] establishing representative offices or appointing local partners and hiring key marketing employees who are familiar with local languages and cultures, [ii] integrating our websites and mobile apps with the representative offices or local partners, and [iii] promoting our brands in these countries;

approximately 20% for upgrading our software and systems; and

approximately 20% for promoting our brands in Malaysia.


Management’s presentation of the company roadshow is not available.

Regarding outstanding legal proceedings, management said it was not aware of any legal proceeding that would have a material adverse effect on its financial condition or operations.

The sole listed bookrunner of the IPO is Network 1 Financial Securities.

Valuation Metrics For Starbox

Below is a table of relevant capitalization and valuation figures for the company:

Measure [TTM]


Market Capitalization at IPO


Enterprise Value


Price / Sales


EV / Revenue




Earnings Per Share


Operating Margin


Net Margin


Float To Outstanding Shares Ratio


Proposed IPO Midpoint Price per Share


Net Free Cash Flow


Free Cash Flow Yield Per Share


Revenue Growth Rate


(Glossary Of Terms)


Commentary About Starbox’s IPO

STBX is seeking U.S. public market investment to fund its expansion plans outside its primary market of Malaysia and into other Southeast Asian countries.

The company’s financials have shown increasing topline revenue from a tiny base, a swing to operating profit and positive cash flow from operations.

Free cash flow for the twelve months ended September 30, 2021, was $1.9 million.

Marketing and Promotional expenses as a percentage of total revenue have dropped as revenue has increased; its Marketing and Promotional efficiency multiple was 18.0x in its most recent fiscal year.

The firm currently plans to pay no dividends on its shares and anticipates that it will use any future earnings to reinvest back into the business.

The market opportunity for e-commerce in Malaysia is large and expected to grow at a strong CAGR of 18% through 2025.

Network 1 Financial Securities is the sole underwriter, and IPOs led by the firm over the last 12-month period have generated an average return of negative (82.7%) since their IPO. This is a bottom-tier performance for all major underwriters during the period.

The primary risk to the company’s outlook is its reliance on advertisers for its revenue, which is still very low.

As for valuation, management is asking investors to pay an Enterprise Value/Revenue multiple of 57x, which is extremely high for a tiny company with little operating history.

The IPO appears to be priced for perfection.

While the low nominal price for the IPO may attract volatility-chasing day traders in early trading, I'm on Hold for the IPO.

Expected IPO Pricing Date: To be announced.

Gain Insight and actionable information on U.S. IPOs with IPO Edge research.

Members of IPO Edge get the latest IPO research, news, and industry analysis.

Get started with a free trial!

This article was written by

Donovan Jones profile picture
Author of IPO Edge
Get IPO Edge with actionable research on next-generation high growth stocks

I'm the founder of IPO Edge on Seeking Alpha, a research service for investors interested in IPOs on US markets. Subscribers receive access to my proprietary research, valuation, data, commentary, opinions, and chat on U.S. IPOs. Join now to get an insider's 'edge' on new issues coming to market, both before and after the IPO. Start with a 14-day Free Trial.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Investing in new issues can be a volatile and opaque endeavor. My research is focused on identifying quality companies at a reasonable price, but I’m wrong sometimes. I analyze fundamental company performance and my conclusions may not be relevant for first-day or early new issue trading activity, which can be highly volatile and unrelated to company fundamentals. This report is intended for educational purposes only and is not financial, legal or investment advice. The information referenced or contained herein may change, be in error, become outdated and irrelevant, or removed at any time without notice. You should perform your own research for your particular financial situation before making any decisions. Investing in new issues is subject to significant volatility and risk of loss.

Recommended For You


To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.