Last Friday, Nanofilm Technologies International Ltd (“Nanofilm”) (SGX: MZH) launched its initial public offering (IPO) at an issue price of S$2.59.
The nanotechnology and advanced material company’s stock was 30.6 times over-subscribed.
This overwhelming subscription was unsurprising.
After all, Nanofilm offers a rare opportunity for local investors to own a technological growth stock.
The stock’s share price increased by 12.4% to S$2.91 on its first day of trading.
Set up in 1999, Nanofilm engages in three different business segments.
They are: advanced materials, nanofabrication, and industrial equipment.
The business segments accounted for 69.5%, 5.3% and 25.2% of revenue respectively for the financial year 2019.
While it may be exciting to jump on the IPO bandwagon, we must remain rational as investors.
As with any stock, there are risks associated with it.
In this article, we will examine three specific risks that Nanofilm faces.
Dependence on a handful of customers
Nanofilm’s top five customers...
