新闻报道

Posted on: 15th March, 2019

Cityneon makes success look like child’s play. In just a few years, the company has transformed itself from a project management company to a full-service ideas agency catering to some of the biggest companies across the globe. But the transformation has been anything but easy: behind the triumph is a hardworking team dedicated to creating immersive exhibitions like no other. “We are a very small company competing in international space,” says Ron Tan, Executive Chairman and Group CEO of Cityneon Holdings. “We started with a three-person team in the office, and today we have 400 employees globally. We owe it to the leadership of the strong management team, and dedicated staffs in the various offices across the globe,” he adds.

Humble beginnings

Cityneon has been in the design and build business for over six decades. Whilst the company has enjoyed several milestones through the years, it also experienced lacklustre growth for the better part of its earlier existence. “The company was experiencing stagnant growth for main parts of its earlier years but started to experience exponential growth in latter years after the acquisition of Victory Hill Exhibitions (VHE), and the implementation of a new management team in place,” Tan notes.

Through VHE, Cityneon initially bagged short-term contracts with industry leaders such as Disney and Marvel. After proving its mettle in creating immersive exhibitions, Cityneon soon established partnerships with top studios including Disney, Marvel, Hasbro, Universal and Lionsgate. “The journey was an amazing and thrilling one. We have now travelled to 26 different cities in different parts of the world – with multiple partners globally,” Tan says.

In less than five years, the company’s market capitalisation has grown more than 15-fold from below S$20m to over S$320 million today. Its net profit jumped 163.6% to S$17.4m. Gross profit increased 83.6% to S$63.8m in FY 2017, and gross profit margin rose to 54.7% from 36.0%. Revenue in FY2017 increased 20.7% to S$116.7m, of which the IPR segment saw a 187.3% increase to S$50.7m in sales compared to the previous year.

Exemplary management

“This is our 62nd year of existence. Not many companies can survive that long and survive that strong. The question was never about making the wrong decisions, as a leader, we need to make decisions – right or wrong. The challenge is what do we do with those decisions thereafter. That is probably the test of a real leader,” Tan says.

Cityneon owes its success not only to Tan but also to its full-fledged management team with deep experiences in different industries. “We are probably also one of the most multi-racial, multi-cultural, multi-experience team of executives you can witness in a small company like ours,” Tan says. “This calls for a multi-faceted leadership style to cater to different cultures and different needs at different times..”

At present, Cityneon’s business encompasses four independent yet integrated divisions – Events and Exhibitions, Thematic Attractions, Interior Architecture and IP Experiences.

“We will open our successful Jurassic World: The Exhibition in Seoul, Korea in 2019. This will be the first time that the exhibition will be in Asia. We are excited to bring our immersive experience closer to home. The first half of 2019 will also witness the opening of The Hunger Games: The Exhibition at MGM in Las Vegas. We also continue to focus on the 2020 World Expo projects with the design and build of various countries’ pavilions,” Tan shares.

Posted on: 12th November, 2018

Organisers of the Marvel’s Avengers S.T.A.T.I.O.N. the new interactive, multi-room experience coming to London’s Excel later this month, have announced additional weekend shows following “overwhelming” demand for tickets.

Having enjoyed successful runs in New York, Seoul, Paris, Singapore, Beijing, Taipei and Las Vegas, S.T.A.T.I.O.N. – an acronym for Science Training and Tactical Intelligence Operative Network – lets guests step inside the films and become part of the Marvel Cinematic Universe storyline, try to lift Thor’s hammer, take a sneaky peak at Bruce Banners Lab and delve into the super-workings and backstory of each member of The Avengers as they train to become an agent.

The additional shows will take place at 9.30am, 9.40am & 9.50am on Saturdays and Sundays.

Highlights include:

The Thor Observatory – dedicated to Thor Odinson, King of Asgard and son of Odin. Test your worthiness by attempting to lift Thor’s hammer, Mjölnir, view Thor’s outfits and study the universe and its current parameters using NASA’s EYE on the exoplanets program.

Check out Captain America’s personnel file and explore the cutting-edge science that made Steve Rogers into Captain America.

Iron Man Engineering Bay – trainee agents have the chance to not only get up close and personal with Iron Man’s iconic suits of armour but also experience what simulated flight inside the suit would be like.

Ever wondered what Bruce Banner’s Lab looks like? Explore the Bio Lab transformation of Dr Banners superior brain as he morphs into The Hulk.

In a world first, and keeping up with the ever-expanding Marvel Cinematic Universe, London’s Marvel’s Avengers Station experience includes never before seen character displays on Black Panther, The Wasp, and Thanos.

The experience has provided a super-powered dose of science and technology by NASA to enhance the authenticity of the experience and pique visitors’ interest in real-world science and technology.

With comprehensive educational materials available for teachers, plus supporting materials created by Quantum Victoria, it is a thrilling learning experience for high school kids to follow STEM pathways by amplifying the scientific themes and characters that are core to Marvel’s storytelling.

Marvel’s Avengers S.T.A.T.I.O.N. debuts a huge collection of Avengers movie-based props and interactive technology for a strictly limited time in London’s ExCel between November and March 2019.

“We are thrilled to announce that, due to huge public demand, we are adding extra time slots to the Avengers S,T.A.T.I.O.N attraction on all weekend performances!” – Nathan Stone (Creative Director of The MJR Group).

Tickets on Sale now at www.avengersstation.co.uk

Posted on: 15th July, 2018

Cityneon Holdings is punching far above its weight when it comes to crafting high-impact experiences which leave customers breathless with excitement. When it comes to producing exhibitions that amaze audiences worldwide, the homegrown full service ideas agency is the trusted partner of household names such as Disney, Marvel, Universal, Hasbro and now Lionsgate.

“A very small company like us in Cityneon to be able to work with multi-billion dollars market capitalization company who value and guard their brands jealously, on a global basis, truly put Cityneon in a different footpath compared to any of our traditional and new competitors, locally in Singapore, and globally internationally,” says Ron Tan, executive chairman & group CEO of Cityneon.

Built to amaze

Since the company acquired Victory Hill Exhibitions in 2015, its Intellectual Property (IP) department has grown by leaps and bounds. Cityneon now has exclusive rights for the exhibition production over Hasbro’s Transformers Autobot Alliances, Universal’s Jurassic World – The Exhibition, and Lionsgate’s The Hunger Games The Exhibition.

“Cityneon is in a much better position today as it was 3 years back. We have a good partner in Lionsgate, and we share similar contacts in the industry that we can cross referenced. Our track records help too. I am really glad we are starting this new relationship with Lionsgate,” Tan says. “We are in discussion with other franchises, and are blessed to have built up a relatively sound reputation in the world – especially in our industry. The process to close this deal is relatively smooth,” he notes.

Cityneon now owns seven permanent and traveling exhibition sets, and will commission up to three new sets by end of 2018, compared to just a single set in 2015. The company has brought its exhibitions to 14 cities worldwide. “This is no easy feat for a small company like Cityneon. Our market capitalization is merely about $300m, relatively small in global scale but to have a company in Singapore to be able to have successful global partnerships with international large studios such as Disney, Marvel, Universal, Hasbro and now Lionsgate, is something that we truly feel blessed about,” Tan explains.

The group’s newest exhibition features the blockbuster Hunger Games franchise. The exhibition celebrates Katniss’ epic journey like never before. It explores the art, science, pageantry, and history of the world of Panem and features more than 1,000 authentic costumes and props, immersive themed environments and set recreations that highlight the technological wizardry and amazing artistry that brought this world to life.

Forging new paths

“This deal is another recognition of Cityneon’s reputation, track records, and confidence that partners such as Lionsgate has in us. This is by no means a frivolous recognition and I do not take such confidence lightly,” says Tan.

With the successful opening of Jurassic World – The Exhibition in Paris, the group has now started constructing the second exhibition set for this franchise, and is in talks for a third and fourth exhibition set. As two more Jurassic World movies will be launched in 2018 and 2021, Tan is optimistic that this will augur well for the Group’s investments into this IP this year and beyond.

Cityneon is setting its sights on the World Expo 2020 which will be held in Dubai and will bring together exhibitors from over 180 nations globally. “We are aligning our ‘traditional’ businesses with the IP businesses – to complement each other strengths, especially in the area of creative & design. We want the company to move from the contractor/ construction mind-set in our industry – to that of creative & design led,” Tan explains.

Cityneon’s efforts have been well-recognised indeed. Last year, the company bagged awards both for its traditional business and its IP experiences.

“These awards represent the hard work of each and every one of our 400 employees in the company. This year’s award for Best Listed Company in our category/ industry is yet another recognition of the continued hard work put in by all in the company, the confidence and trusts our industry partners, clients, and suppliers have in us. We are blessed and honored to receive this award and will continue to strive to be best in class in the years ahead,” Tan adds.

Posted on: 3rd May, 2018

SINGAPORE (May 3): CIMB is reiterating its “add” call on creative solutions provider Cityneon Holdings with an unchanged target price of $1.58 which is based on 14 times CY19F P/E, in line with the industry average.

The move follows news of the group securing a multi-year licensing deal with Lionsgate for The Hunger Games exhibit – which represents its fourth intellectual property (IP) acquisition after blockbuster franchises Universal Studios’ Jurassic World, Disney’s Marvel Avengers S.T.A.T.I.O.N, and Hasbro’s Transformers Autobot Alliance.

In a Thursday report, lead analyst Ngoh Yi Sin says she expects stronger and more sustainable earnings growth for Cityneon in the medium-term, considering its scalable business model and expanded IP portfolio.

Despite being positive on Cityneon’s earnings prospects on all fronts, the analyst is retaining his FY18-20F assumptions for now prior to the group’s release of its 1Q18 earnings results on May 11.

With the construction of the group’s second Jurassic World travelling set in progress, he expects this to come in handy for more touring agreements once the set is completed in 2H19, together with the launch of the movie’s sequels this year and in 2021.

After a strong opening weekend for Avengers: Infinity War, Ngoh thinks the group is poised to gain from the movie’s success on higher ticket & merchandise sales anduptake of its Avengers S.T.A.T.I.O.N travelling sets – as well as the opportunity to benefit from the Marvel cinematic universe’s strong movie pipeline.

Potential talks for prequels or spin-offs could rejuvenate The Hunger Games moviefranchise, he adds, apart from Lionsgate’s current plans to develop theme parks in Dubai, China and South Korea.

“Downside risks to our ‘Add’ call could stem from unexpected delays in the roll-out of travelling sets; key potential catalyst is further uptake of travelling sets,” says the analyst.

As at 10.36am, shares in Cityneon are trading flat at $1.05 or 1.92 times FY19F book.

Posted on: 2nd May, 2018

The odds, it seems, are in Cityneon Holdings’ favour.

The group’s wholly-owned subsidiary, Victory Hill Entertainment Group, has signed an exclusive worldwide touring exhibition license agreement with Lions Gate Exhibition for The Hunger Games: The Exhibition.

The accretive licensing agreement provides an outlet for immediate revenue streams and profits, and marks the fourth blockbuster brand intellectual property (IP) rights licence for Cityneon.

Cityneon’s first three IP licenses are Marvel’s Avengers S.T.A.T.I.O.N., Transformers – Autobots Alliance, and Jurassic World – The Exhibition.

The Hunger Games exhibition celebrates the blockbuster franchise with a dynamic exploration of the world of Panem, featuring more than 1,000 authentic costumes and props, immersive themed environments, and set recreations.

The licensing deal will allow Cityneon to expand the global territory of the attraction, which has already toured New York, San Francisco, Sydney, and Louisville. The agreement also provides Cityneon with a first right to produce future travelling exhibits for the studio.

The agreement is for a period of seven years, with the potential for a maximum renewal of a further seven years.

The group says the fees payable to Lionsgate under the agreement comprise both fixed and variable components, but did not disclose the value of the contract as it constitutes a “non-disclosable transaction”.

“By partnering with major studio Lionsgate and adding their strong brand, The Hunger Games, Cityneon continues to successfully grow worldwide and to share immersive experiences with movie fans around the globe,” says Ron Tan, Cityneon’s executive chairman and group CEO.

In a separate announcement on Wednesday, Cityneon says it has into an agreement with Universal Picture to build the second set for Jurassic World – The Exhibition.

According to the group, the Jurassic World exhibition has welcomed more than a million visitors since it was first launched in Melbourne, Australia in 2016.

“To enable Jurassic World: The Exhibition to reach more people around the world, we started to build the second exhibition set. We believe that the roll out of the second touring exhibition set will be another roaring success,” says Tan.

“Universal Pictures has recently announced their plans to produce another movie to the Jurassic world sequel in 2021. The timing of the movie release will augur well for both the exhibition sets,” he adds.

Shares of Cityneon last closed at $1.05 on Monday. The company had called for a trading halt before market open on Wednesday, pending release of the announcements.

Posted on: 12th March, 2018

There is nothing more frustrating for Ron Tan than the public’s level of knowledge (or the lack of it) of his company, but it is also the catalyst that is pushing him to transform the firm as it prepares to complete its fourth intellectual property (IP) by the first half of this year.

The executive chairman and group CEO of Cityneon Holdings is on a quest to break away from perceptions formed of the company with others in the same industry like Pico Group and Kingsmen Creatives.

“We’re trying to move towards creative and design, so that people understand that we’re no longer in the category. In our industry, they like to call us the “Phua Chu Kang”. We have Pico, Cityneon, and Kingsmen. I like to say that ‘C’ already left the PCK category,” Mr Tan told The Business Times in a recent interview, drawing reference to the popular Singa-porean sitcom character in the 1990s.

Cityneon, in its results announcement last month, said that it will continue to align the group’s traditional core business with the intellectual property rights (IPR) business, especially in the area of creative and design.

The company, which started out as a supplier of electrical appliances in 1956, now has five business units: exhibition services, experiential environment, event management, interior architecture, and IPR, its strongest performing segment.

For the full-year ended Dec 31, 2017, Cityneon’s net profit jumped 160 per cent to S$17.4 million. Gross profit increased 84 per cent to S$63.8 million in FY 2017, and gross profit margin rose to 54.7 per cent from 36 per cent a year ago.

Revenue in FY 2017 increased 21 per cent to S$116.7 million, of which the IPR segment saw a 187 per cent increase to S$50.7 million in sales compared to the year-ago period. Revenue in the other segments decreased.

Expansion in the IPR business has been aggressive. The group’s third and latest IP acquired in August last year granted it the full global rights to Jurassic World Exhibition after a deal was made via a sale and purchase agreement to acquire all of JP Exhibitions LLC for US$25 million. This allows Cityneon to make full use of the exhibition’s IP in partnership with Universal Studios.

The first two IPs secured by Cityneon’s wholly-owned subsidiary Victory Hill Exhibitions were Disney’s Marvel Avengers S.T.A.T.I.O.N. and Hasbro’s Transformers Autobot Alliance.

On its fourth IP, Mr Tan said that it “won’t be anywhere close to what we did for Jurassic”.

“For the recent (IP in) Jurassic, people assume that I’m going to buy another company, but people forget that Avengers and Transformers (were) not purchased. They were developed by me. My fourth (and) fifth IP can be developed here,” he said.

Cityneon announced last August that it recruited the former director of creations at Cirque du Soleil, Welby Altidor, who is now group chief creative officer of the company.

Mr Tan told BT that he is growing the current workforce dedicated to creative and design from 7 per cent to about 50 per cent, but would not disclose who else he is hiring.

BT understands that Cityneon is currently close to finalising a deal with a global design and production company and the additional manpower for Cityneon’s design team will come from that company.

Recently, Cityneon had managed to snag US$60 million in funding for mergers and acquisitions and its fourth IP, which Mr Tan said was no mean feat.

“If you look at the size of the company, we are only over S$200 million in market cap. How do we raise US$60 million? We are able to (based on) the relationship my financial partners have in China and Hong Kong.”

Still, the achievements of Cityneon don’t seem to be reflected in its trading multiples today, Mr Tan added. He believes that the company, which has grown about 15 times since he joined in the second half of 2015, is under-valued in the stock market.

“Name me one company in Singapore that works with Disney, Marvel, Universal, Hasbro. These huge companies give us their brand and we produce the experience around these brands. For that matter, name me one in Asia. You cannot! I find it excruciatingly painful,” he said.

In an equity research report dated Feb 28, DBS Group Research issued a “buy” call for Cityneon and pinned a target price of S$1.45 based on a price-to-earnings (PE) valuation peg of 14.4 times, which is at a “20 per cent discount to peers’ average PE of 18 (times)” on FY 2018 forecasted earnings.

On March 1, UOB Kay Hian similarly issued a “buy” call on the stock and set a PE-based target price of S$1.55 that was pegged to peers’ 15.4 times 2018 forecasted PE. At current levels, the stock is trading at a bargain of 9.8 times 2018 forecasted PE, the brokerage said.

On Friday, Cityneon closed one Singapore cent higher at S$1.03.

“(Pico and Kingsmen) are trading around 11 or 12 times. They’re giving us almost the same multiple as them. Our multiples have to go up because a creative and design company trades at a different multiple. It’s very obvious that the financial industry doesn’t understand who we are,” Mr Tan said, adding that Cityneon should be trading at a PE ratio of 20 to 25 times.

He did, however, acknowledge that it was “partly our fault” that Cityneon’s branding is not visible enough.

“I spend a lot of time focusing on the business, the fundamentals. Last year, I had to spend so much time on (a) corporate exercise. This year, we built up our management team. (The company) was spending a lot more time on the road so that people understand who we are. You cannot blame the investors. It takes time and I believe the time will come,” he said.

Mr Tan is aiming high, setting an ambitious target of bringing the company to S$1 billion in market capitalisation, but that means that big changes have to be made to enhance the appeal of the company.

As a result, Cityneon is undergoing a major rebranding exercise that is expected to finish by June this year. He tells BT that for this move, there will be “someone external recommended by a government agency, someone who’s really known”.

Cityneon’s management team will also be expanding, and although there are scant details, Mr Tan is sure that he will retain his executive chairmanship and CEO position post-rebranding.

“It is my baby. I am here to see through this change and transformation. This rebranding will then tell what Cityneon is going to be.”

Some considerations in this move include a possible change in logo or even the name of the company, but Mr Tan is not of the opinion that there is a need to alter the latter.

“To be honest with you, I she bu de (“can’t bear to” in Mandarin). It’s an old brand name that’s been around for many years. We have to change how we position ourselves, how people know who we are. That’s what I want to achieve,” he said.

Posted on: 5th February, 2018

近年来，复仇者联盟（Avengers）和变形金刚（Transformers）让市场开始留意到城贸控股（Cityneon）。它其实已有超过60年历史，是本地具规模的展览与建设公司。

2015年带着Victory Hill Exhibitions（简称VHE）加入城贸的陈益智，为这家老字号注入澎湃的新血。如今集团七成营收仍来自传统业务，三成来自特展业务；但特展业务贡献七成盈利，传统业务只贡献三成。

执行主席兼集团首席执行官陈益智接受《联合早报》访问时说，争取到这些电影的知识产权（Intelligent Property），可用于互动特展及其他方面。最重要的是它属于较低风险、高回报的投资，而且增长潜能十分巨大，可推动集团长足发展。

传统业务主要分成主题环境（如主题公园和世博馆）、室内建筑（如图书馆、酒店和医院）、活动（如第一方程式赛事活动基础设施）和展览四大部分；不仅是建造，也包括设计。

股价一年内激增近两倍

1956年城贸以霓红灯饰供应起家，后来业务扩大至店铺展示、零售门面设计和安装等。1970年代公司还受澳大利亚贸易委员会委托，为“澳大利亚制造”贸易展览会搭建展台及提供物流服务，那也是新加坡举办的首场展览会。2005年公司在新加坡交易所（SGX）挂牌。

2008年来自马来西亚上市公司星媒集团（Star Media Group）入股，持城贸64.1％股权，2012年前后集团业务陷入瓶颈。

2014年星媒集团开始接触陈益智，邀他加入。当时他所经营的展会筹办和推广公司VHE，已和美国漫威娱乐（Marvel）签署合作协议，争取到复仇者联盟的知识产权。

陈益智说：“我们其实有好几个融资管道，但最后决定加入城贸，原因有几个。首先它是一家老字号，在本地市场已建立名声；其次它当时的现金充裕，甚至高于市值；另外，它的创办人持股不高，是一家企业化经营的集团，有专业制度和人员。此外，我们举行特展需要设备，这方面可以和城贸起协同作用。”

因此，2015年陈益智和他的公司成为城贸一分子。那一年VHE也争取到孩之宝（Hasbro）的变形金刚知识产权。集团业务蓄势腾飞之际，和大股东星媒集团的理念出现分歧。

“我们希望能把握当下的机会，在短时间内把集团市值推高到10亿元，虽然当时的市值只有约2000万元。星媒集团认为业务已取得相当进展，不妨按部就班。”后来，陈益智有份的Lucrum 1 Investment买下星媒集团所持股权，目前持城贸69％股权。

城贸的股价在2015年底只有0.325元，一年后激增至0.93元； 去年10月股价达到1.26元高峰，目前在1元左右。集团2017年上半年的税后净利同比增加64％至770万元。

希望开发自家知识产权

2014年起复仇者联盟的《S.T.A.T.I.O.N》特展在美国、韩国、新加坡、中国、台湾和俄罗斯陆续举办，今年是澳大利亚和瑞典。《变形金刚汽车人联盟》特览今年起也在中国开跑。

去年集团也通过收购JP Exhibitions公司资产，取得《侏罗纪世界》（Jurassic WorldWith）的知识产权。

陈益智透露，集团通过互动特展取得的收入，不仅有主办单位付给的许可证费用和版权税，还会收取布置组装费用（约500万美元），以及门票、周边商品、会场餐饮、摄影等方面的抽成。

他举例：“就像邀请周杰伦来开演唱会，主办单位得付他每天的唱酬，还有舞台设计、乐队和舞群等的费用，以及门票和售卖周边商品的抽成。” 集团的展具今年会增至八套，可在八个地点同时展出。虽然说是展览，但整体设计更注重互动体验，让观众身临其境，感觉自己也受到攻击。

接下来集团会继续争取更多知识产权，但在选择时必须考虑到电影票房是否超过10亿元，而且会不会拍续集。

集团在美国拉斯维加斯拥有一个永久场地，陈益智希望能在那里举办属于自己知识产权的特展，并把它带到全世界巡展。那会是一个怎样的项目？

陈益智说：“我在等集团首席创意总监给我答案，必须能带给人们全新的感观体验，就像当初太阳马戏团那样一鸣惊人。”

一家新加坡公司能够站在国际舞台并不简单，陈益智形容“就像站在巨人的肩膀上，让人们有机会看到和认识我们。”虽然集团目前的市值已超过2亿元，陈益智认为这样的规模还是太小，必须不断壮大才能与他人竞争。

Posted on: 8th January, 2018

Gigantic is an understatement when describing the growth of 60-year-old Cityneon Holdings.

The ideas and service agency had always wanted to emulate home ground Singapore, which rode on the shoulders of giants to get where it is today, to grow to be successful in the experiential exhibition industry. It is now that giant itself and with partners such as Disney and Universal Studios, Cityneon is currently in a Marvel-lous position to transform entertainment for a generation of superhero fans with innovative, interactive exhibitions.

First launched in 1956 as a family-run supplier of electrical appliances, Cityneon has grown in more than mere leaps and bounds in a new business that leverages intellectual property rights from the major studios to organise exhibitions.

The Singapore Exchange listed company (SGX:5HJ) specialises in crafting quality customer and brand experiences in the fields of interior architecture, events, exhibitions and theme parks; and they include the Marvel Avengers S.T.A.T.I.O.N exhibition, Hasbro Transformers Auto-bot Alliance and Jurassic World, The Exhibition.

Cityneon’s executive chairman & Group CEO Ron Tan said with technology and the speed of information at our fingertips, especially for millennials who have increasingly shorter attention span.

“They no longer want to spend money to visit a static exhibition. Therefore, our shows are immersive attractions where visitors get drawn deep into the world of The Avengers and explore the origins of their favourite Marvel superheroes,” he said in a previous interview.

Cityneon is committed to high excellence, precision and creativity, and is proficient in conceptualising and creating immersive attractions, theme parks and exhibitions featuring state-of-the-art technologies and immersive storytelling.

Growing bigger and brighter

And the past few years were probably the most gratifying aspect of Mr Tan’s tenure at the helm of Cityneon. Apart from having deepened its relationships with international movie studios and multinationals and governments globally for both its traditional and Intellectual Property businesses, the company’s market capitalisation has grown more than 15-fold from below S$20 million to around S$268 million today. Its share price was S$1.07 when market closed on Nov 21 (2017).

In May (2017), Lucrum 1 Investment, an investment holding company controlled by three key directors (Massive, Mutual and Ron Tan) of whom Mr Tan was one. He owns 15.5 per cent stake in the vehicle, bought the entire stake from Cityneon’s major stakeholder Star Media. Lucrum 1 currently holds a 68.95 per cent stake in Cityneon after making a mandatory unconditional cash offer for its ordinary shares in July, making Mr Tan the single largest individual shareholder with the full control of Cityneon’s businesses.

No guts, no glory

In the recent announcement, Cityneon is facing a possible cash offer as Hong Kong firm Mutual Power, an indirect wholly-owned subsidiary of Teamway International Group Holdings (previously known as Jin Bao Bao), to acquire the shares held by Massive rights, which holds about 76 per cent stake in Lucrum 1.

Mr Tan said you need guts to stay ahead of the pack. “We are on the right track to grow, barring any unforeseen global calamities. No guts, no glory,” he said.

“It is a marathon we are running, but we are only at the cusp of the game. Perhaps the distance we have run is merely the first 5km. We still have 37km more to run before we complete the whole marathon. But who’s to say we won’t be signing up for another few marathons?”

Cityneon is headquartered in Singapore. It has a subsidiary, Victory Hill Exhibitions.

Posted on: 7th November, 2017

FOR Ron Tan, the executive chairman and group CEO of events and exhibitions company Cityneon Holdings, the transformation of the over 60-year-old company in the past few years is probably the most gratifying aspect of his tenure at the head of the SGX-listed company so far.

“Cityneon is probably one of the oldest companies in our industry, founded in 1956. I spoke to one of the pioneers of the company some months back and he told me that he was amazed at how the company is being positively transformed these two years. This is especially heart-warming and assuring,” he says.

The company has recently introduced a new business that leverages intellectual property rights from the major studios to organise exhibitions.

Some examples of this include the Marvel Avengers S.T.A.T.I.O.N exhibition, Hasbro Transformers Auto-bot Alliance and Jurassic World, The Exhibition.

As a leading service agency, Cityneon specialises in crafting quality customer and brand experiences in the fields of interior architecture, events, exhibitions and theme parks.

The company is committed to high excellence, precision and creativity, and is proficient in conceptualising and creating immersive attractions, theme parks and exhibitions featuring state-of-the-art technologies and immersive storytelling.

Along the way, the company has deepened its relationships with international movie studios and multinationals and governments globally – Disney, Marvel, Hasbro and Universal, as well as government agencies from Bahrain, Oman and Qatar – for its traditional and Intellectual Property businesses.

This has helped the company’s market capitalisation grow more than 15-fold from below $20 million to around $300 million today.

“The company is now able to attract management talent that can share and execute its corporate visions,” says Mr Tan.

Overcoming challenges

Mr Tan says that the toughest challenge he faces as CEO is balancing the needs, wants and expectations of the company’s different stakeholders – shareholders, management and employees, partners such as movie studios as well as clients.

He even counts his own family as part of this juggling act.

“For a growth company like ours, and that rapid growth we experienced over the past two years, there were great pressures to balance these needs – as many can be conflicting,” he says.

“Take ‘time’ for example, a finite commodity. The balance to split those waking hours among the different stakeholders often presents itself as a true struggle. Another example can be the conflicting short- and long-term views and opinions of the company.”

To overcome this, Mr Tan says it is important to stay disciplined and focused on the fundamentals.

“I need to set the vision and deliverables beyond that of quarterly or half-yearly reporting requirements as a public listed company, and to continue to build a sustainable organisation that can be around for many years and decades to come, while achieving the promises made to all stakeholders at various junctures of the journey.”

Mr Tan describes his management style as: “Talk the Walk. Walk the Talk.”

“This involves communicating the company’s vision and for the team to deliver what we said and what we set out to do. And also to deliver the best-in-class. It takes a lot of discipline but I believe it makes us feel good about ourselves when we can deliver on our promises. We grow to become a better person,” he explains.

He believes that the company is on the right path, with the recent introduction of intellectual property businesses that are supported by fundamentally sound and strong traditional segments of the company.

“We are on the right track to grow, barring any unforeseen global calamities,” he says.

His key challenge is to motivate his people and develop their talents for the journey ahead.

“As we are a relatively small company still in terms of market capitalisation, I always like to point out to the management that we are as strong as our weakest link. We need to upgrade and continue to challenge all our team members here in Singapore and in different parts of the world and for all, if not most, to subscribe to the belief and share that common vision to work in a company most can be proud of in their latter years.” Mr Tan says.

Posted on: 18th September, 2017

Ron Tan is somewhat bemused that his mother cannot understand what he does. The CEO and executive director of Cityneon Holdings recounts how he had explained to her that his company built Marvel’s Avengers S.T.A.T.I.O.N. exhibition, which was shown in Singapore earlier this year. Her response was to look quizzically at him and ask: “What do you do again?”

Fortunately, he appears to have better luck explaining to investors. Following some recent corporate action, the 46-year-old is now steeting Cityneon firmly into the immersive exhibition business. Cityneon already has licenses to produce and distribute exhibitions related to Walt Disney’s Marvel’s The Avengers and Hasbro’s Transformers brands. The company recently bought JP Exhibitions for US$25 million ($33.8million), which will give it intellectual property (IP) rights for Jurassic World: The Exhibition.

Tan thinks such blockbusters exhibitions will do very well in large, uniform markets such as China and parts of Latin America. “Especially Brazil, which has 300 million people, and a lot of them are fans [of Marvel characters],” he says. “Singapore will be a tough market because we are all in meeting rooms, but the ticket price will be higher. [In China and Latin America], tickets prices will be lower than [Singapore’s] but the numbers will make up for it.”

He has wooed the former executive creative director of creations at Cirque du Soleil to join him. Welby Altidor will oversee the creative direction of all Cityneon’s blockbuster exhibitions. Tan is also trying to restructure Cityneon’s other businesses, which include designing and building theme parks, pavilions and expos. He reckons the margins of these businesses will improve as he brings costs down and wins more contracts.

From neon lights to dinosaurs

Cityneon started out 61 years ago as a supplier of electrical appliances and neon lights. It later expanded into doing installation works for retailers and exhibitors. The company was listed in 2005. Three years later, Malaysia-listed Star Media Group bought a controlling stake in Cityneon.

When Cityneon found Tan in 2014, the company was battling stagnating revenue growth. Tan, on the other hand, was running the very exciting business of building exhibition booths featuring Marvel characters. His company, Victory Hill Exhibitions, had designed an initiation ceremony for exhibition visitors to be inducted into the Avengers team. The whole set included interactive superheroes, quizzes and high-tech gadgetry, and had managed to earn rave reviews from fans of the comic series and the blessings of Disney and its subsidiary Marvel.

Aiming to lift its earnings and win over investors, Cityneon acquired Victory Hill for $20 million in August 2015. Cityneon raised $15.9 million through a one-for-one rights issued at 18 cents each to finance the acquisition. It also issued Tan 45 million Cityneon shares at 20 cents each.

The acquisition of Victory Hill has increased Cityneon’s market value by more than six fold – from $40 million in 2014 to $264 million today. Shares of Cityneon, after adjusting for splits, have returned just over 380% over the last three years. Last year, the company earnings per share grew 290% to three cents.

But Tan always felt that he could do more. And earlier this year, he got his chance. Hong Kong private equity firm ZHJ Capital told Tan that a couple of Chinese investors were interested in working with him. ZHJ had backed Starclouds Entertainment Development, which is Cityneon’s partner for the operation of the Transformers Experience in China, Macau and Hong Kong.

After meeting these investors – Geng Zhihua, a Chinese investor with a focus on high-growth companies, and Hong Kong listed packaging manufacturer Jin Bao Bao Holdings (now known as Teamway International Group) – Tan decided to join hands with them. He had received offers from other investors with potentially better financial terms, but he wanted someone he could work with. “I needed a partner who would agree with what I want to do,” he says, “a partner who would give me a certain amount of autonomy to do what I want to do to bring [Cityneon] to the next stage.” He adds that these investors have contacts in China. “They put forth a couple of introductions for us there that could [lead to potential partners for our exhibitions].”

The three parties formed a special purpose vehicle called Lucrum 1 Investment to make a takeover offer to Star Media in May this year. Star Media disposed of its 52.5% stake or 128.5 million shares at 90 cents each, bagging a $68.7 million disposal gain. Lucrum now owns 69% of Cityneon while Tan owns 15.5% of Lucrum.

Cityneon has since announced a new board of five members, consisting of Tan, the chief financial officer of Teamway International Group, and three independent directors. Shares in Cityneon have come up 18% since the announcement of the takeover offer, closing at $1.065 on Sept 14.

Profitable business

The movie-based exhibitions business, which Cityneon calls its intellectual property rights segment, is the company’s most profitable segment. It made up 18.3% of revenue last year, but 60% of earnings. For 1HFY2017 ended June, revenue from the IP business increased 60.8% to $16.5 million. It made up 33% of the group’s revenue. Earnings for the period rose 62.4% to $7.7 million.

Analysts expect Cityneon to book higher revenues and earnings following the acquisition of the IP for Jurassic World, which Cityneon will have the rights for till 2027. Cityneon paid an upfront fee of US$20 million for these rights. An additional US$5 million due if the sets make US$5 million earnings for the 12 months to January 2018. “Given such a strong franchise and track record, its purchase price of five times forward earnings is attractive, versus the 7.5 times earnings that Cityneon paid for Victory Hill Exhibitions,” says CIMB Research.

The Jurassic World exhibition saw 430,000 visitors in the six months it was display in Melbourne, Australia, and 400, 000 visitors over five months in Philadelphia, the US. Tan expects more than one million visitors for Cityneon’s Chicago Jurassic World set, which has been on display since late May and will end its run in January 2018. “The Chiago exhibition is bigger than previous sets. We have more velociraptors running around,” he says.

The exhibition will tour two other US cities after Chicago. Tan says Cityneon is building another set for Asia, a process that takes about five months. The company is likely to produce a one-off exhibition for Jurassic Park’s 25th anniversary. UOB Kay Hian projects yearly visitors of 600,000 for Jurassic World.

Tan also has a pipeline of Transformers and Avengers exhibitions until 2019. Cityneon has one permanent Avengers exhibition in Las Vegas and three travelling Avengers sets. The first is in Taiwan until this month end. Analysts say this set is expected to tour three countries in Europe after, ending its run in 2Q2019. The second set is in Beijing, China. The third will tour Sydney, Australia, starting March 2018. A Transformers set will debut in China this coming November.

For travelling exhibitions, Cityneon typically partners other players that will take on operational risks. Cityneon takes an upfront fee and a 20% to 30% royalty fee on everything ranging from tickets to sponsorship. It also takes a cut from merchandise sales. According to CIMB, 10% of tickets sales is payable to Marvel.

For Cityneon, the biggest risk is the cost associated with building the display. The first exhibition of a new IP can be very costly. The first Jurassic World set cost US$6 million, and subsequent installations cost US$5 million. Nevertheless, the payback can be lucrative. The gross profit margin for a travelling set is around 85%, while that for a permanent exhibition is around 60%. The Jurassic World exhibition recorded a net profit of $3.3 million for the period between April and December 2016.

“These exhibits are evergreen and remain successful long after the movie run in theatres,” says Al Lieberman, executive director of the entertainment, media and technology programme at New York University’s Stern School of Business. “In some ways, it is the reason for the continuing success of Madame Tussaud’s wax collection of movie, music and television stars.”

CIMB projects Cityneon’s earnings to be $15.5 million this year and $22.8 million in 2018 – up substantially from $6.7 million in FY2016. The new projections are based on higher revenue contributions from the Jurassic World IP, additional financing costs for bank borrowings, higher capital expenditure for new sets and a stronger oder book from Cityneon’s other businesses. The brokerage has a “buy” call and a price target of $1.40.

UOB Key Hian, too, has a “buy” call but a more bullish price target $1.50. “We raise our 2018 to 2019 net profit estimates by 12.2% and 7.5% respectively as we account for the new Jurassic World exhibit,” the brokerage says. “We have removed our dividend forecast as the group focuses on expansion. The stock now trades at a bargin of 10.1 times FY2018 forward earnings versus its peers’ average of 15.4 times FY2018 forward earnings, with a superior ROE.”